FILE PHOTO: A woman walks past a Sprint store in New York City, U.S., April 27, 2018. REUTERS/Brendan McDermid/File Photo

(Reuters) - Sprint Corp S.N on Friday reported fewer-than-expected losses in quarterly net phone subscribers who pay a monthly bill, as the U.S. wireless carrier's cheaper plans helped it retain customers amid its pending merger with larger rival T-Mobile US TMUS.O.

The company said it lost a net 128,000 phone subscribers during the first quarter. Analysts were expecting a net loss of 150,000 subscribers, according to research firm FactSet.

This helped the company post a smaller-than-expected loss and beat Wall Street estimates for revenue, sending its shares up 2.4% in trading before the bell.

“... the business still faces several structural headwinds and I remain convinced the merger with T-Mobile is the best outcome for our customers, employees, industry and all stakeholders,” Sprint Chief Executive Officer Michel Combes said.

Sprint and T-Mobile, the No. 4 and No. 3 U.S. wireless carriers respectively, behind AT&T T.N and Verizon Communications VZ.N are in the process of merging with each other.

Sprint’s earnings announcement comes about a week after the U.S. Justice Department approved its $26 billion merger with T-Mobile.

As part of that approval, T-Mobile agreed to divest Sprint's prepaid businesses including Boost Mobile and other assets to Dish Network Corp DISH.O to build out a viable fourth carrier in a couple of years.

Sprint reported a net loss attributable to the company of $111 million, or 3 cents per share, in the quarter ended June 30, compared with a net income of $176 million, or 4 cents per share, a year earlier.

Analysts were expecting a loss of 4 cents, according to IBES data from Refinitiv. Total net operating revenue rose to $8.14 billion from $8.13 billion, above estimates of $8.06 billion.