Canada telecoms line up for airwaves, Mobilicity hampered

TORONTO (Reuters) - Canada's biggest telecom companies and most of its smaller ones have lined up to bid in two upcoming auctions of airwaves, the federal government said on Thursday, with struggling startup Mobilicity able to stump up only enough cash to participate in more enticing of the two.

The Conservative government, eager to balance its budget ahead of a general election in October, while also trumpeting consumer-friendly moves to increase wireless competition, has made large amounts of spectrum available for auction this year.

But large chunks of the newly available airwaves, a finite resource phone companies rely on, have been marked off-limits for the three largest players: BCE Inc's (Toronto:BCE.TO - News) Bell, Rogers Communications Inc (RCIb.TO), and Telus Corp (Toronto:T.TO - News). The three have long held most of Canada's spectrum and dominate the market.

An auction of high frequency AWS-3 will begin on March 3. Bidding on similar airwaves just concluded in the United States, raising a record $44.9 billion.

Participants will include Bell, Rogers and Telus, as well as regional operators Manitoba Telecom Services (Toronto:MBT.TO - News), SaskTel, Bragg (Eastlink), Quebecor Inc's (QBRb.TO) Videotron, and Tbaytel, plus recent market entrants Wind Mobile and Mobilicity.

Mobilicity, under creditor protection since late 2013, will not participate in a later auction of 2500 MHz airwaves.

SaskTel will also not take part in that auction, set for April, while rural providers CCI, SSi, and Xplornet will participate.

(Reporting by Alastair Sharp; Editing by Peter Galloway)