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A woman talks on her cellphone in front of Union Station in Toronto in this file photo.

The federal government has lost yet another bidder for a crucial auction of wireless spectrum early next year.

Toronto-based private equity firm the Catalyst Capital Group Inc. has withdrawn from the 700 megahertz auction, according to a disclosure on Industry Canada's website late Wednesday. At first blush, the development appears to be yet another blow to Ottawa's efforts to create more competition in the $20-billion wireless market. (Read Boyd Erman's column published in October about that here.)

Catalyst is a major bondholder in struggling startup carrier Mobilicity, which is currently under court protection from its creditors. (Mobilicity did not register for the auction and is currently pursuing a court-supervised sales process.)

Catalyst said it "generally has been and remains supportive of the government's telecom and wireless policy and auction."

Last month, Victoria-based Vecima Networks Inc. and 1770129 Alberta Inc., a company headquartered in Calgary that controls Corridor Communications Inc., both withdrew from the 700 MHz auction.

That means only 11 companies are left to vie for the most valuable public airwaves that have ever come up for bidding in Canadian history – an outcome that could define the competitive landscape in the wireless industry for decades.

Fifteen companies had originally applied to participate in the 700 MHz auction. In October, another Toronto private equity firm Birch Hill Equity Partners Management Inc. was the first applicant to drop out.

Ottawa is spending $9-million on a national advertising campaign to promote its wireless policies. But its failure to attract a new viable competitor to the auction has thrown into question the government's effort to ensure more choice in the market.

A shrinking list of bidders, however, is good news for the Big Three wireless carriers (Rogers Communications Inc., BCE Inc. and Telus Corp.) because they face less competition for those valuable wireless licences.

The first round of bidding in the auction is set to begin on Jan. 14, 2014.

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