TORONTO (Reuters) - Canada's auction of wireless spectrum ended on Monday and new players appear poised to enter the market and challenge the country's Big Three carriers in a fight for mobile phone subscribers.

The auction of airwaves over which wireless services are delivered raised C$4.25 billion in 331 rounds and almost two months of bidding. The proceeds were more than twice the amount analysts had expected.

"The auction exceeded our expectations in terms of the level of competitive bidding activity," Industry Minister Jim Prentice said in a statement.

Wireless spectrum has become a highly desirable asset for telecom companies that see data services such as wireless e-mail, text messaging and multimedia downloads as key to their growth. Having more spectrum lets companies offer a broader menu of services to a larger base of subscribers.

"Over the next few months, I expect every player -- large and small -- to be speaking with each other to find both strategic as well as tactical opportunities to consolidate market share," said Carmi Levy, an industry analyst at AR Communications.

According to the auction website, Rogers Communications Inc, which owns Canada's largest wireless firm, was the top bidder with offers totaling C$999.4 million.

Telus Corp, Canada's No. 2 phone company, had C$879.9 million in standing high bids. Telecom giant BCE Inc had bids totaling C$740.9 million.

The three companies currently dominate Canada's wireless landscape, though analysts have cautioned that their aggressive spectrum spending could leave them vulnerable to competitive threats posed by newcomers.

The government had set aside a chunk of spectrum exclusively for bidding by new entrants -- a move the Big Three providers criticized as being tantamount to an unfair subsidy.

As the auction concluded, Quebecor Inc, which bid a total of C$554.5 million, and Globalive Communications, with bids totaling C$442.1 million, appeared to pose the most serious threat to the existing carriers.

Analysts have suggested that Quebecor, a printing and media company with an established presence in its home province of Quebec, could partner with Globalive to create a national service provider.

"If you are a smaller player, it's in your best interest to initiate discussions as soon as possible to bulk up and offer a national or a near-national scale offering," Levy said.

A third participant that could shake up the market is Data & Audio-Visual Enterprises Wireless, chaired by entrepreneur John Bitove. It has a total of C$243.2 million in high bids. One of Bitove's partners in DAVE Wireless is the investment arm of Vulcan Inc, an organization founded by Paul Allen, a co-founder of software giant Microsoft Corp.

A fourth major bidder among the newcomers is Shaw Communications Inc, a Western Canadian cable and communications group. It had a total of C$189.5 million in standing high bids as the auction ended.

The company said in a statement on Monday that it bought up spectrum in Western Canada and Northern Ontario. Its chief executive, Jim Shaw, said ownership of spectrum "is an important strategic asset for Shaw and represents good value for our shareholders."

(Additional reporting by Louise Egan; editing by Peter Galloway)

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