* EPS C$0.26 vs C$0.29 year earlier
* Analysts forecast EPS C$0.35
* Revenue up 11 percent at C$906 mln
* Loses 1,400 basic cable subscribers
* Little detail on wireless plan (Adds comments from conference call, closing stock prices)
By Susan Taylor
OTTAWA, Jan 14 (Reuters) - Shaw Communications Inc's (SJRb.TO) SJR.N first-quarter results are a mixed bag of good and bad news, analysts said on Thursday, with disappointingly scant detail of the Canadian cable and telecom company's wireless plans.
Shaw posted stronger than expected revenue, but had an unexpected drop of 1,400 basic cable subscribers, as competition heated up from Telus Corp's (T.TO) TV offering.
Key questions remain about Shaw's wireless strategy after the company only said it plans initial steps to "commence wireless activities" in 2010, with a build-out over several years.
Chief Executive Jim Shaw said the wireless focus is currently on fundamentals such as costs, equipment, suppliers and core operations. While nothing is definite, the company might also took to bring in a wireless partner.
"We don't need a partner, but we're not ruling that out," Shaw told analysts on a conference call.
"It would be a question of whether they brought something to the table that would be of help to us, like maybe tower sharing or equipment sharing," he said.
Partners could include Canada's Big Three phone companies, which currently control 95 percent of the wireless market: Telus, Rogers Communications (RCIb.TO) and Bell Canada (BCE.TO). It might also be a U.S. company, given Ottawa's recent decision to allow Egyptian-backed Globalive to operate a wireless service, he said.
The market has keenly awaited details ever since Shaw spent C$189.5 million ($183.9 million) on a wireless spectrum auction in 2008. Three months ago, Shaw said its "total plan" was not yet ready, but it was interested in cautious expansion.
"It's a very competitive business and so to the extent that we can be stealth like, we're going to be," Shaw said.
A repeat of its 2010 forecast coupled with a 5 percent dividend increase approved on Thursday suggest modest wireless investments in 2010, Genuity Capital Markets analyst Dvai Ghose said in an interview.
"I don't really understand why this shouldn't be a priority at this time," he added, pointing to Shaw's strong balance sheet, customer base and competitive track record. "I think it's necessary for defensive reasons."
The market should be a priority because a growing number of Canadians use wireless phones, and increasingly it is their only phone. Moreover, it takes substantial time to establish a wireless network and new entrants, such as Globalive, are already entering the market, Ghose said.
Shaw is also being scrutinized as a potential investor in debt-laden Canwest Global Communications Corp CGS.V, Canada's largest media company. Parts of Canwest, which has a broad palette of television and publishing interests, are under bankruptcy protection.
"We will always keep our options open," said Shaw, adding that the company has never discussed Canwest's newspaper assets. "We have not decided what we would do, but as you know, they're all in bankruptcy there, so certainly it's something that we would consider."
For the quarter ended Nov. 30, the company said net earnings fell to C$114 million, or 26 Canadian cents a share, from C$123.5 million, or 29 Canadian cents a share.
Excluding one-time items, such C$81.6 million in debt retirement costs and a C$44.6 million loss on financial instruments in the latest quarter, earnings increased to C$180 million from C$122 million.
Operating income before amortization jumped 29 percent to C$475 million, reflecting a big one-time fee recovery from Canadian regulators. Without the one-time gain, there was an 8.5 percent improvement.
Revenue rose 11 percent to C$906 million.
Analysts had expected Shaw to earn 35 Canadian cents a share in the quarter on revenue of C$895 million, according to Thomson Reuters I/B/E/S.
Basic cable subscribers fell by 1,416 to 2.3 million, while digital customers rose by 88,259 to 1.4 million. Internet customers rose by 36,242 to 1.74 million and digital phone lines grew by 61,461 to 923,365.
Shares of Shaw dipped slightly on Thursday, sliding 4 Canadian cents to end at C$20.66 on the Toronto Stock Exchange and down 9 cents at $20.09 in New York.
$1=$1.02 Canadian Reporting by Susan Taylor with additional reporting by Isheeta Sanghi in Bangalore, editing by Rob Wilson