The Canadian government is continuing in its quest to attract new players to the country's mobile market by once again reserving spectrum for new entrants at an upcoming auction.

Industry Canada on Monday published the government's initial plans for the auction of AWS-3 frequencies early next year. These include reserving a 30-MHz block of spectrum for newcomers – a total of 50 MHz will be up for grabs - and strict provisions on the transfer of spectrum between operators.

The rules appear to be designed in particular to give Canada's current 'newcomers' a boost; that is, the likes of Mobilicity and Wind, which both entered the market after the 2008 AWS auction and are now struggling for survival.

"Today's announcement will help operating new entrants acquire valuable new spectrum to help expand their networks and deliver fast, reliable service to Canadians," said James Moore, Canada's industry minister, in a statement on Monday.

With additional spectrum to play with, both companies would constitute a more attractive proposition for investors.

Both operators are keen to find a buyer, but in-market consolidation has proven impossible due to the government's refusal to allow their spectrum to pass to one of the country's big three network operators: Bell Canada, Rogers Wireless and Telus. The spectrum Mobilicity and Wind acquired in 2008 came with strict resale conditions, essentially to prevent the big three getting their hands on it.

Telus made its latest attempt to acquire Mobilicity earlier this year after a specific ban on the transfer of AWS spectrum expired, but Ottawa still moved to block the deal; the parties are currently taking part in mediation. Meanwhile, Mobilicity is operating under court protection from its creditors.

Canada was keen to attract newcomers to the sale of 700-MHz spectrum that took place in January. For a while it seemed that U.S. heavyweight Verizon would take part, but in the end it elected to focus on its domestic business. To make matters worse for Ottawa, Wind Mobile pulled out on the eve of the auction, having failed to secure the funds to participate from its parent company Vimpelcom.

Nonetheless, Industry

...