TORONTO (Reuters) - Canada's Big Three wireless carriers could find their shares under increasing pressure later this year as upstart competitors prepare to crack the country's cozy mobile calling market.

A government auction of wireless spectrum last year ensured a more crowded Canadian wireless market, thanks to rules that reserved some of the fresh spectrum for newcomers.

New players such as closely held Globalive Communications and Quebecor Inc secured licences across Canada, promising to offer service by 2010 or sooner. Canadians will welcome them with open arms, having long complained of high wireless prices and lack of choice.

"It represents quite possibly the most significant change to the Canadian wireless market in a very long time," said Carmi Levy, an independent technology and telecom analyst. "Life is about to get a lot tougher for the incumbent players."

The established Big Three carriers — Rogers Communications Inc, BCE Inc and Telus Corp — also snapped up more airwaves in the auction. In all, the sale raised about C$4.25 billion ($3.8 billion) for federal coffers.

Shares of Rogers and Telus have declined more than 20 percent since the auction ended, in part because the recession has crimped subscriber growth, but the threat of stepped-up competition has also played a role.

BCE, the parent of Bell Canada, has suffered an even more pronounced slump, reflecting the collapse of a planned leveraged buyout last year.

Now, with the upstarts promising service launches in the coming months, analysts warn the Big Three will have to adjust quickly if they want to maintain their reign over wireless Canada.

"Probably the most exposed, I think, is Rogers," said Troy Crandall, an analyst at MacDougall, MacDougall & MacTier.

He said the newcomers are expected to use the GSM wireless standard or a related next-generation technology. Rogers thus far has been the only GSM carrier in Canada, an advantage that has allowed it to be the exclusive carrier of Apple's popular iPhone.

However, Crandall said, the GSM "monopoly" that Rogers has "is about to disappear". BCE and Telus are also working together on a network upgrade that will take advantage of the same technology that Rogers uses.

More competition generally means higher costs of doing business, lower prices and tighter profit margins. Weakened profitability, in turn, pressures shares.

"Obviously, it's a legitimate concern," said Gavin Graham, director of investments at BMO Asset Management, whose funds hold shares of the Big Three providers.

Even so, Graham feels the stocks already reflect most of the potential competitive threat.

Not everyone agrees, however. In a recent note to clients, David Lambert, an analyst at Canaccord Adams, recommended clients sell their Rogers shares and kept a "hold" rating on BCE "as we expect wireless competition ... could negatively impact wireless pricing in Eastern Canada."

The TSX was closed yesterday for the Labour Day holiday.