(Adds analysts comments, background on spectrum)
Nov 12 (Reuters) - Dish Network Corp added 35,000 pay-TV subscribers in the third quarter, far exceeding Wall Street expectations, sparking a 4.4 percent jump in its shares in early trading on Tuesday.
Wall Street analysts looked for Dish to lose 39,000 subscribers in the quarter, according to market research firm StreetAccount. Revenues also topped analysts' estimates.
This quarter, Dish beat back cable competitors and grabbed more customers on favorable prices for its services. Cable providers Time Warner Cable Inc, Comcast Corp and Charter Communications Inc all reported losses in video subscribers.
"This was the quarter that cable really tried to exhibit pricing discipline and it lost market share," said Todd Mitchell, an analyst with Brean Capital.
"When (cable providers) raise the price on the bundle, their weak subscribers go to more aggressive telco offerings and their good subscribers downgraded to a double play and called the satellite guys. I think you are seeing it across the board," Mitchell said.
Dish satellite competitor DirecTV also added more customers than expected in the third quarter.
Dish has been trying to diversify beyond its core pay-TV business. One looming question is co-founder Charlie Ergen's plan for the roughly $3 billion worth of wireless spectrum he bought in the last few years.
Dish, which earlier this year lost a battle with SoftBank Corp to take over Sprint Corp and smaller operator Clearwire Corp, has said it eventually wants to use the wireless airwaves that it owns to offer mobile video services.
Ergen has also talked up network-sharing partnerships with an existing network operator such as No. 3 U.S. mobile operator Sprint or T-Mobile US Inc.
Almost a year after receiving U.S. government approval to go ahead with a wireless service, Dish has yet to announce a plan.
The company made no mention of Ergen's plans in its earnings report on Tuesday.
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The company added 75,000 broadband subscribers in the quarter, well above Wall Street's estimate of 62,000.
"The core business which I had regarded as suspect, looks a lot healthier this quarter," said Matthew Harrigan, an analyst with Wunderlich Securities.
Dish shares rose to $49.60 in premarket trading from a close of $47.50 on the Nasdaq. The shares have jumped about 30 percent since the start of the year.
Its pay-TV average revenue per unit (ARPU) rose to $81.05 from $76.99.
Dish reported net income of $315 million, or 68 cents per share, in the quarter, compared with a net loss of $158 million, or 35 cents per share, a year earlier.
In the year-earlier period, net income was reduced by $453 million due to a legal settlement with Voom, a now-defunct network owned by AMC Networks Inc and AMC's former parent Cablevision Systems Corp.
Revenue rose 2 percent to $3.60 billion, compared with expectations of $3.58 billion, according to Thomson Reuters I/B/E/S.
(Reporting by Jennifer Saba in New York and Chandni Doulatramani in Bangalore; Editing by Savio D'Souza and Jeffrey Benkoe)