By Randall Palmer and Louise Egan
OTTAWA, Sept 23 (Reuters) - Major foreign telecommunicationscompanies have not registered for a Canadian wireless spectrumauction, raising questions about the government's plans tointroduce more competition into the mobile telephone sector.
The lack of major foreign entrants in a list of bidders thatthe government published on Monday is good news for the dominantCanadian companies - Rogers Communications Inc, BCEInc and Telus Corp. The three had complainedthat the auction rules favored foreigners.
In all, 15 companies registered to bid on the 700 MHzspectrum in an auction that kicks off on Jan. 14 (Factbox onbidders: ). The process may last two to sevenweeks, based on how long similar auctions have takeninternationally.
Shares of Rogers, BCE and Telus rose in morning trading. Allthree stocks had taken a beating in June on reports that VerizonCommunications Inc was looking to enter the Canadiantelecommunications market. Verizon later said it would not doso.
"We view the list as a key positive for the incumbents and akey disappointment for the government, which wants four carriersin every market," Dvai Ghose, head of research at CanaccordGenuity in Toronto, said in a research note.
The Conservative government has tried to ensure a fourthplayer could challenge the incumbents in each region of Canada,and it eliminated foreign ownership restrictions on smallcompanies to try to attract competition.
"Surely now the government realizes that the market will notsupport four carriers per market and must rethink its failedwireless policy," Ghose said.
But Industry Minister James Moore did not concede defeat,saying the government's efforts to increase competition amongtelecoms had already led to lower prices.
"This trend will continue as a result of January's auction,"he said in a statement. "In addition to this auction, ourgovernment will continue to aggressively pursue policies thatensure consumer interests are at the core of all governmentdecisions."
Among the auction registrants is a unit of Canadian privateequity firm Birch Hill Equity Partners Management Inc, which wastipped earlier as a possible bidder for small companies WindMobile and Mobilicity.
Sources familiar with Birch Hill's plans said in August thatthe company had sought financial backing from Rogers in a planthat involved Wind Mobile's sharing its network with the marketleader.
Mobilicity Chairman John Bitove is listed as a bidderthrough a company called Feenix Wireless Inc. Separately,private equity firm Catalyst Capital Group Inc, which ownsMobilicity debt, also signed up.
With no Verizons or AT&Ts in the mix and what he termedmuted private equity interest, Ghose said the government mightraise less revenue from the auction than it had hoped. Heestimated the cost for each of the four prime blocks at wellbelow the C$500 million ($485 million) he had initially assumed.Interest from a big foreign carrier like Verizon would havebrought the price per block to about $1 billion, he said.
The information provided on Monday did not reveal companies'bidding strategies, such as the regions where they plan to bid.
There are 14 regions, with seven spectrum blocks in each.But four of those blocks are most coveted because they arealigned with U.S. airwaves.
The registered companies can withdraw from the auction andget a full refund on their deposits. The government will publishthe final list of provisionally qualified bidders on Oct. 23.
BCE shares climbed 0.8 percent to C$44.26 on the TorontoStock Exchange. Rogers was up 1.4 percent at C$45.47, and Telusrose 0.4 percent to C$34.71.
Vodafone (VOD)
