Feb 11 (Reuters) - India's Vodafone Idea VODA.NS reported a smaller-than-expected third-quarter loss on Tuesday, as the telecom operator's per-user revenue continued to be boosted from July's tariff hikes.

Vodafone Idea — 22.6% owned by the Indian government — was formed by a merger between the Indian arm of the UK's Vodafone Group VOD.L and Aditya Birla Group's Idea Cellular in 2018. It has posted a loss in every quarter as it continues to lose market share.

The company's consolidated loss after tax narrowed to 66.09 billion rupees ($762.20 million) in the quarter ended December 31, from 69.86 billion rupees a year earlier.

The loss was smaller than analysts' average estimate of 69.78 billion rupees, according to data compiled by LSEG.

Vodafone Idea's average revenue per user (ARPU), a key performance metric for telecom firms, rose 4.2% from the previous quarter and 19.3% from a year earlier to 173 rupees, boosted by an increase in mobile plan rates.

However, the key metric lagged peer Reliance Industries RELI.NS-owned Jio's 203.30 rupees and Bharti Airtel's BRTI.NS 245 rupees.

All three mobile carriers' ARPUs have grown between 12% and 18.5% as of December-end after a tariff hike in July marked an industry-wide shift in strategy from competing for market share to increasing profitability.

Airtel and Jio have reported upbeat quarterly profits.

Vodafone India's user base declined 2.5% sequentially and 7.2% year-on-year to 199.8 million as of December 31, lagging behind Jio's 482.1 million and Airtel's 414 million.

Its revenue from operations rose about 4.2% to 111.17 billion rupees, missing analysts' estimates of 112.54 billion rupees, while its total expenses shrunk 2.5% led by a dip in network expenses.

Vodafone Idea's shares closed 3.2% lower ahead of results.

($1 = 86.7090 Indian rupees)

(Reporting by Aleef Jahan in Bengaluru)

((aleefjahan.cs@thomsonreuters.com))