MONTREAL - Cellphones are among the most popular consumer products and an online auction taking place to open up competition in Canada's wireless industry is eventually expected to help consumers.

Bidding in Industry Canada's spectrum auction since it began at the end of May was almost at $4.2 billion on Thursday, more than doubling the amount of money originally expected.

The three established cellphone players - Rogers Communications Inc. (TSX:RCI.B), Telus Communications Inc. (TSX:T) and Bell Mobility Inc. (TSX:BCE) - are participating in the auction and so are a number of cable TV and long-distance providers looking to get into the cellphone market.

The auction seems highly technical to outsiders but consumers are in mind.

Participants are bidding vast amounts of money daily for more than 270 licences for radio waves across the country over which cellphone networks operate. The auction will continue until there are no more high bids.

Telecom analyst Mark Goldberg said despite the billions spent in bidding, consumers will see more competitive prices with new services and bundles of services.

"I think it's going to be bundling and it's going to be new capabilities as you deliver higher-speed services to mobile devices," said Goldberg, from Mark Goldberg and Associates Inc. of Thornhill, Ont.

"We're going to see the same kinds of creative innovation on mobile as we've seen on traditional Internet or wireline Internet. Some of those services haven't even been a spark in somebody's mind yet," Goldberg said.

"What does that mean for advertisers coming up with services that reverses the prices on things?"

Goldberg said, for example, consumers could get $10 off their monthly cellphone bills for receiving advertising such as electronic coupons delivered to their cellphones that would entitle them to discounts at fastfood restaurants.

In Canada, there were about 20 million cellphone subscribers and half of all phone connections are now wireless, according to the Canadian Wireless Telecommunications Association.

Goldberg also noted that, despite the high bidding in the spectrum auction, there will be money left to build or expand cellphone networks because the costs are lower than in years past.

Analysts have estimated the cost of building a new national cellphone network anywhere from a low of about $500 million to a high of about $1.5 billion.

The three big players with the country's only national networks at this time were leading bidding on Thursday, but they can't bid on the 40-megahertz of spectrum specifically reserved for new players in the cellphone market.

Rogers had bid $948.8 million for 55 licences while Telus had bid $846.7 million for 60 licences. Bell had bid $733 million for 53 licences.

Montreal-based Quebecor Inc. (TSX:QBR.B), which owns the Videotron cable and telecom business, had bid $549.3 million for 16 licences primarily in Quebec.

Toronto-based Globalive Wireless had bid $443 million for 31 licences and is looking to become a national cellphone competitor. Globalive currently offers the Yak long-distance, residential phone and Internet services.

Analyst Troy Crandall said the high bidding in the auction may initially affect consumer prices.

The high bidding may minimize "very, very ultra-low pricing" and other lower prices initially aimed at bringing consumers to their brands.

"It may enforce more price discipline on the part of the new entrants," said Crandall of MacDougall, MacDougall and MacTier in Montreal.

The high amounts of money bid by Rogers, Telus and Bell will have to be made up somewhere, he added.

"They're not going to go forward and just eat this themselves," Crandall said. "They're going to pass this onto the consumer at some point."

If the strategy of Rogers, Telus and Bell was to bring up the bidding costs to limit new players, it would appear they've been successful, Crandall said.

RBC Capital Markets analyst Jonathan Allen said the auction can still go on for days.

"Like the Energizer Bunny, it keeps going," Allen wrote in a research note.

But Allen said bidders were continuing to "pick away" at lower value spectrum licences.

The Yukon and Northwest Territories, small urban centres in Ontario and Saskatchewan and Winnipeg were the most significant areas still getting bids, Allen wrote.

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