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UPDATE 1-SoftBank Q3 profit falls as swelling empire ups sales costs

* Oct-Dec net profit falls 13.4 pct to 97.25 bln yen

* Third-quarter hit by rise in sales costs after Sprint buy

* Apr-Dec net profit rises 58.1 pct to 488.23 bln yen

TOKYO, Feb 12 (Reuters) - SoftBank Corp, which runs Japan's third-largest mobile carrier by subscriber numbers, reported a dip in third-quarter net profit after a string of acquisitions incurred steep integration costs.

SoftBank took its mobile-related enterprises to over 1,300 companies this fiscal year with purchases including U.S. No.3 carrier Sprint Corp, U.S. handset distributor Brightstar, and Japanese app developer Gungho Online Entertainment Inc .

The company, whose mobile arm lags those of NTT DoCoMo Inc and KDDI Corp in Japan, is now reportedly on the hunt for U.S. No.4 carrier T-Mobile US Inc though regulator concern over reduced competition could scupper any deal.

In October-December, acquisition-related costs pushed SoftBank's net profit down 13.4 percent to 97.25 billion yen ($949.89 million) from 112.28 billion yen a year earlier.

SoftBank attributed the decline to a 127 percent increase in the cost of sales, brought about primarily by the purchase of Sprint.

For nine months to December, profit rose 58.1 percent on year to 488.23 billion yen, the company said in a statement on Wednesday.

Shares of SoftBank closed 0.2 percent lower ahead of the earnings release compared with a 0.6 percent rise in the benchmark stock index.

EXPANSION

SoftBank's mobile carrier unit remains Japan's third-largest carrier in terms of total subscribers though it surpassed DoCoMo and KDDI in terms of revenue, operating profit and net profit in April-September.

SoftBank shoots into first place when including global subscribers from Japanese units such as Willcom and e-Mobile as well as U.S. unit Sprint.

SoftBank spent $21.6 billion to acquire Sprint in September and soon after was reported to be interested in buying T-Mobile US. U.S. rival AT&T Inc was once blocked from buying T-Mobile US by antitrust regulators and SoftBank would be up against similar resistance.

An official at the U.S. Justice Department's antitrust division, William J. Baer, told the New York Times it would be difficult to approve a merger among the top four carriers because it would reduce competition.

CEO Son on Wednesday said U.S. competition is insufficient and declined to comment on potential regulatory hurdles.

Sprint Chief Executive Dan Hesse has said further consolidation in the U.S. would create healthy competition against the two dominant players, AT&T and Verizon Communications Inc.

"I think that there is a very big gap between the two strong companies and the two weak ones," Son said on Wednesday. "I plan to strengthen the position of the No.3 company."

SoftBank, which started life as a software distributor, also owns stakes in companies such as Yahoo Japan Corp and Chinese online retailer Alibaba Group Holding Ltd which is preparing to list this year.

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