Canada's spectrum auction nears end

By Wojtek Dabrowski

TORONTO (Reuters) - A government auction of wireless spectrum aimed at bringing fresh competition to Canada's cellphone market has reached its final stretch, with total bids reaching more than C$4 billion ($3.9 billion) so far -- about twice the amount expected.

A range of companies that don't yet have a large wireless presence but either crave one or are weighing the business case for a regional or national push, have emerged in the bidding for airwaves over which wireless services are delivered.

With bidding expected to end soon, the three top telecom companies, which already dominate Canada's C$13 billion wireless market -- Rogers Communications Inc (RCIb.TO: Quote), BCE Inc (BCE.TO: Quote) and Telus Corp (T.TO: Quote) -- lead the pack in the dollar value of high bids across the country.

But fresh competition could mean smaller margins for the Big Three, and industry observers have warned the incumbents may have to spend more on marketing, promotions and fighting for subscribers with newcomers.

"Just the mere thought of new entry to the wireless market has made them sharpen and lower their prices," said Amit Kaminer, an analyst at telecom consulting firm SeaBoard Group.

Telus, Rogers and BCE are offering aggressive promotions in hopes of locking in customers for multi-year contracts, he said. This could thin out the potential subscriber base for any newcomers.

Among possible new contenders is a company controlled by Montreal-based media and publishing group Quebecor Inc (QBRa.TO: Quote) QBRb.TO, which has committed C$556 million in bids. Quebecor has long said it plans to build out a network across its home province of Quebec, also BCE's home turf.

Globalive Communications, a privately held firm that offers cheap long-distance calling, has put up more than C$444 million. It has said it is confident it will be able to buy enough spectrum to become a national player.