The Canadian spectrum auction due to be held in January next year has failed to attract interest from any major foreign operators.

The lack of interest in the 700MHz spectrum band is a blow for the government which was aiming to attract a fourth major operator to boost competition in a mobile sector dominated by the ‘big three’ domestic telcos Rogers Communications, BCE and Telus.

Although there remains a possibility that a foreign company could buy one of the smaller Canadian operators that has registered to bid for spectrum, this is seen as unlikely.

A total of 15 companies signed up to bid for the spectrum in the auction that is due to commence on 14 January. The final list of bidders is due to be published on 23 October.

Canadian private equity firm Birch Hill Equity Partners Management, which has previously been touted as a possible buyer of Wind Mobile and Mobilicity, is among the registered bidders. Mobilicity chairman John Bitove has also registered, along with private equity firm Catalyst Capital Group, which owns Mobilicity debt.

Despite the lack of a foreign bidder, Industry Minister James Moore said in a statement that the government’s policies have already increased competition and lower prices. He added that this trend will continue “as a result” of the spectrum auction.

The auction has been dogged by controversy with BCE, Rogers Communications and Telus saying auction rules unfairly favour big foreign companies.

A regulation change to allow foreign investors to own smaller telecoms operators prompted interest from Verizon Communications, with the US company reportedly making a $670 million bid for Wind Mobile in June and entering takeover talks with Mobilicity.

With their share prices suffering, the big three operators reportedly took their concerns to the government in July. In addition, BCE said government policy that effectively blocks Canada’s largest players from buying smaller domestic competitors could allow Verizon to acquire those businesses at “cut-rate prices”.

Verizon has since said it will delay any potential acquisitions in Canada until after the spectrum auction.

According to GSMA Intelligence, Rogers had 9.4 million connections at the end of Q2 2013, with BCE and Telus both having around 7.8 million. With just 28.6 million connections in the whole of Canada, the three operators hold 87 per cent of the market.

Wind Mobile and Mobilicity both launched their services in 2008, but have failed to break the stranglehold of the big three. Wind has around 620,000 connections, while Mobilicity 356,000 connections.