In the same week that Ottawa proudly unveiled the winners in its wireless spectrum auction, industry experts are saying some of these new players may not be around all that long.

But consumers will still benefit from cheaper phone rates in the longer term, they said.

"The government's rules allow new entrants to negotiate with each other. So the final shape of the industry might not be what it is today," said Lawrence Surtees, vice-president of International Data Corp., a technology consultancy. "There are a whole litany of possibilities."

On Monday, a group of companies paid more than $1.5 billion to the government for the right to enter Canada's wireless phone market in an auction that netted a total $4.2 billion for federal coffers.

Most of these firms say they will be in the sector for a long time. History, however, has shown that new telecommunications carriers often wind up selling out, either to other new players or to more established companies.

Surtees noted that when Ottawa opened up the country's mobile market more than a decade ago, the belief was that new national carriers would provide strong competition to Bell Mobility, Rogers Communications Inc. and the other existing phone companies.

Eventually, however, both startups — Microcell and Clearnet — ended up as subsidiaries to Rogers and Telus Corp., respectively.

Under the current setup, 40 per cent of the new spectrum has been allocated to companies that do not already provide service within Canada. But the government also is prepared to allow the winners to merge among themselves, Surtees said.

The licence winners must wait 30 business days after the close of the auction on July 21, according to Industry Canada, the federal department that managed the sale process, but following that the new companies can talk to each other about possible combinations and co-operation.

In Surtees's opinion, Shaw Communications Inc., which received 18 of the new licences, could start negotiations to sell them as soon as Ottawa's restrictions end.

Competition, technology to reduce prices

Even if the number of wireless carriers drops, however, consumers will still gain from lower prices, according to Iain Grant, of Montreal's Seaboard Group.

The current wireless companies charge too much for their services, especially in growing areas such as data transmission, he said.

They will be forced to bring down those rates to remain competitive with newer carriers, Grant said.

In the end, he said, how many companies you have competing does not matter.

"We're after low prices," Grant said.

One new company, Globalive Communications Corp., run by Anthony Lacavera, has become the new standard for business efficiency in the sector, he said.

"He brings down company costs like no one else," Grant said.

Surtees agreed that wireless prices will fall and remain low for consumers, citing new technologies as the reason.

The introduction of Apple's hugely popular iPhone, for example, is placing pressure on existing carriers to cut prices to customers who want to download large videos or movies, he said.