The government auction of wireless airwaves, expected to net new cellphone providers next year, continued to slow down on Tuesday with bids hitting $3.3 billion and firming up along regional lines.

Round 44 of the auction was highlighted by Quebecor Inc.'s withdrawal of a bid for one of the four wireless licences up for sale in Toronto, leaving the company holding high bids on 12 licences, all in Quebec and Eastern Ontario. Quebecor had designs on setting up a national cellphone network before the auction began, but the withdrawal of its Toronto bid may mean the Montreal-based company is resigning itself to its home province.

Quebecor's bid withdrawal actually lowered the auction's total net by $79 million from the previous round, although the company will have to pay a penalty after the sale closes.

Calgary-based Shaw Communications Inc. ended the day holding high bids on 18 licences, mostly in Western Canada. Halifax-based Bragg Communications, which operates Maritimes cable provider Eastlink, held high bids on 19 licences, mostly in Eastern Canada with a few in Ontario.

Industry watchers looking for a new national network to spring up following the auction are pinning their hopes on Globalive Communications Inc., which sells phone and internet services through its Yak brand, as well as Data & Audio-Visual Enterprises, a company owned by Toronto entrepreneur John Bitove. The companies ended the day holding high bids on 45 and eight licences respectively, both broadly across the country.

There is also the possibility that companies winning licences in their respective regions could team up after the auction to form a new national wireless carrier.

The government in November said the Canadian wireless market, ruled by Rogers Communications Inc., Bell Canada Inc. and Telus Corp., was not competitive enough. Industry Minister Jim Prentice said the auction would be conducted with special rules that reserved 40 per cent of the airwaves being sold for new entrants.

Rogers, Bell and Telus are allowed to bid on the remaining 60 per cent of licences, along with new entrants. The three companies ended Tuesday holding high bids on 52, 44 and 54 licences respectively.