Sprint Nextel Corp plans to sell HTC Corp's Hero cell phone based on Google Inc's Android operating system, intensifying competition in the crowded U.S. smartphone market dominated by Apple Inc's iPhone.

Sprint, which already sells Palm Inc's Pre smartphone, said on Thursday it will start selling Hero on October 11 for $179.99 before tax and after $150 of rebates for customers who sign a two year contract.

The news highlights the tough competition Motorola Inc will face ahead of its September 10 announcement of its own Android products.

Sprint's plan to sell Hero may also hurt T-Mobile USA's MyTouch phone, also built by HTC with the Android system. Some analysts have said the Hero has more features than MyTouch.

The Hero's features include tight integration of social networking services such as Facebook. This is similar to Palm's Pre, for which Sprint currently has exclusive U.S. rights.

Apple's iPhone, whose exclusive carrier is AT&T, starts at $99. Palm's Pre starts at $199.

Sprint has been forging agreements with phone makers for some of the market's hottest phones in an effort to help stem its steady customer losses.

Asked if Hero could cannibalize sales of Pre, Sprint spokesman James Fisher said the company wanted to broaden its lineup to cater to different kinds of customers.

For example, people who want one phone for personal and business use might opt for Pre, he said, while consumers who are focused on getting their hands on the latest mobile applications might opt for Hero because of its access to Google's applications store.

Sprint shares were up 6 cents at $3.58 on the New York Stock Exchange.

(Reporting by Sinead Carew; Editing by Derek Caney)

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