Microcell Telecommunications Inc., owner of the Fido cellular phone network, has hung up on the $1.1-billion hostile takeover bid by western telecom giant Telus Corp. made this month.

Microcell said it is recommending shareholders reject the “inadequate” Telus bid and said it has received inquiries from other potential bidders. But it remains open to a better bid from Telus or other potential buyers.

The sale of Microcell would reduce the Canadian wireless market to three players and eliminate an industry “problem child” accused of undermining the health of the mobile-phone sector because of its aggressive pricing.

After Telus launched its offer May 14, Microcell (MT.B-TSX) said it began a full strategic review and will use the time it has under a shareholders rights plan to “pursue all its alternatives.”

This could include the sale to Telus or to another company, an investment in Microcell, the sale of some assets or a combination of these options, or none of them.

Microcell, the smallest of the four wireless telephone providers in Canada, went through a period of bankruptcy protection to emerge a year ago owned by its creditors.

With 1.2-million customers, Microcell is engaged in a nasty head-to-head battle for market share with Telus in Quebec and in Vancouver, where Microcell recently launched a low-budget offering to compete with wireline telephones.

Telus (T-TSX) offered $29 a share, but shares had climbed to $32.15 by the end of last week, fuelling expectations of a richer bid from Telus or a rival offer from a competitor.

Besides Telus Mobility, the other major domestic cellphone companies are Bell Mobility (BCE-TSX), owned by Bell Canada, and Rogers Wireless, controlled by Rogers Communications (RCM.B-TSX), Canada’s largest cable TV and wireless operator.

Microcell said its financial advisers, J.P. Morgan Securities Inc. and Rothschild, concluded the Telus offer was inadequate.

Microcell also evoked the possibility of another, higher bid. “The company has been contacted by other parties that have indicated their interest in pursuing discussions that could result in competing bids or other transactions,” Microcell said. “The company intends to hold discussions with any other interested parties that may emerge.”