* Net wireless subscriber gains down 46 percent at 48,000
* Average revenue per wireless user down 5.6 percent
* Shares down 10.6 percent at C$31.75 (Adds company comments. Updates share price)
By Scott Anderson
TORONTO, April 9 (Reuters) - Telus Corp (T.TO), Canada's No. 2 telephone company, said on Thursday that first-quarter financial results for its wireless unit will be squeezed by lower than expected subscriber growth and customer spending, news that sent its shares down more than 10 percent.
Telus said a weak economy is hurting its wireless operating results, accelerating a trend seen in the previous quarter. The company will report its results on May 7.
"The first quarter is one of their seasonally weaker quarters. So ... it does make it more prone to volatility in their results," said Troy Crandall, an analyst at MacDougall, MacDougall and MacTier in Montreal.
Telus said preliminary results show it added 48,000 net wireless subscribers in the period ended March 31, a drop of 46 percent from the same period last year, as more business customers deactivated their phones.
A 0.3 percent increase in gross wireless subscribers in the first quarter was down from a 4.8 percent gain in the fourth quarter and 17 percent growth in the year ended Dec 31.
The Vancouver, British Columbia-based company also said its average revenue per wireless user (ARPU) dropped 5.6 percent to C$58.39 from C$61.88 in the quarter.
The company said ARPU was hit by lower service revenue from its Mike line of communication devices, an increased proportion and use of lower per minute rate plans, including greater use of in-bucket minutes, and decreased roaming revenues.
"The major dynamic is the impact of the recession," Robert McFarlane, Telus chief financial officer, told Reuters. "Reducing employment has had its impact."
Telus shares were down 10.6 percent at C$31.74 on the Toronto Stock Exchange.
Telus said in February that its mobile phone subscribers had pulled back on their spending as the economy forces them to conserve cash.
The company said at the time that its average monthly revenue per wireless subscriber fell 2.4 percent to C$62.16 in the fourth quarter.
Crandall expects Canadians will continue to trim telecom spending because of the recession, including cable television and wireless costs. This is expected to hit the other major telecom players including BCE Inc (BCE.TO) and Rogers Communications (RCIb.TO).
"If one is feeling the pinch, then the others are probably feeling the pinch too," he said.
"Though it could be a bit more disproportional to Telus, at least on the manufacturing and construction side of things, just because the Mike phones were so popular and Telus did have a pretty good share of that market."
$1=$1.23 Canadian Additional reporting by Susan Taylor in Ottawa; editing by Peter Galloway