The federal government's auction of 2500 MHz wireless spectrum started at 10 o'clock eastern time today, and some of Canada's wireless companies could be poised to buy the building blocks to expand and improve their networks.

Wireless spectrum is the network over which wireless devices like cellphones and tablets send and receive data. Wireless companies need more and more spectrum to keep up with the growing demand for data transmission, so the government auctions off new stretches of airwaves at periodic intervals under certain rules.

The auction is for 318 blocks of spectrum across the country in the 2500 MHz band. Two of Canada's biggest wireless companies, Rogers and Bell, aren't expected to be very active in this round of spectrum sales because the government imposes caps on the amount of spectrum that any one company can own in any given market — and both companies are already at or near that limit in some of Canada's biggest cities.

That's good news for Telus, one wireless analyst said, because the company is now poised to pick up valuable spectrum at a discounted rate, if Bell and Rogers aren't bidding on many of the biggest blocks. "As Telus has no 2500 MHz spectrum at this time, we assume that it will win in all major markets," Canaccord analyst David Ghose said.

Other players

Another company that could be poised to improve its network is Toronto-based Wind Mobile, a company that Ghose expects will pick up 2500 MHz spectrum in the big cities where it already operates, such as its densely populated home base in Ontario.

As well, Ghose said he will be looking to see whether or not Quebec-based Videotron picks up spectrum outside of Quebec and Eastern Ontario, as that would be another sign that the company could be planning to offer cell service across the country.

Mobilicity, another upstart cellular company that's had financial issues of late, did not submit a deposit to participate in the auction, so they won't be eligible to buy any new blocks.

The government is holding another auction of wireless spectrum today, the results of which will be revealed within five business days following the end of bidding. (Darryl Dick/Canadian Press)

The 2500 MHz band of spectrum has the potential to improve cell transmission in urban places that currently get spotty coverage, such as elevators and parking garages. But it's also viable to rural companies for transmitting internet connections where wired services aren't practical. It's also valuable because it's used internationally, in the U.S., Europe and China. And phones like the iPhone 6 and the Motorola Nexus 6 can operate on the 2500 Mhz band, Ghose noted, which adds to its appeal for carriers.

The auction won't end until a complicated, multi-level bidding process is complete, which could take days or even longer. But the federal government said it will reveal the results of the auction within five business days of the end of bidding.

Previous auctions raised billions of dollars for government coffers. But because two of Canada's most deep-pocketed wireless companies aren't expected to be major players, the current auction is unlikely to be as much of a cash cow.

Ghose reckons Telus will spend about $268 million, Wind may pay up to $120 million and Videotron may have an interest in about $60 million worth. The reserve price, the lowest bid level that Ottawa would accept for new spectrum, is set at $252 million, so that's the minimum of what the auction could bring in.