Sprint Nextel Corp posted a narrower fourth-quarter loss on Wednesday, but revenue fell 7 percent even as the company's loss of bill-paying cellphone customers was slower than expected.

Sprint posted a loss of $980 million, or 34 cents per share compared with a loss of $1.6 billion, or 57 cents per share in the same quarter the year before. The latest quarter included a non-cash tax related charge of $306 million.

Revenue fell to $7.87 billion from $8.43 billion the year before and compared with the average Wall Street expectation for $8.03 billion, according to Thomson Reuters I/B/E/S.

In the quarter Sprint lost 504,000 postpaid subscribers who pay monthly bills and commit to long-term service contracts. This compares with the average expectation for a loss of 668,000 subscribers from six analysts contacted by Reuters.

Its iDen network added 483,500 prepaid customers who pay for calls in advance but do not commit to a contract.

Sprint shares were down 4 cents to $3.61 in premarket trading.

(Reporting by Sinead Carew; editing by Derek Caney)