UPDATE 1-Iliad executive rules out Free Mobile merger

Thu Feb 28, 2013 3:43am EST

* Cites strong organic growth

* Speculation had centered on potential SFR deals (Adds background, details)

PARIS Feb 28 (Reuters) - Upstart telecoms operator Iliad has no need to pursue a merger for its fast-growing Free Mobile unit, the company's deputy CEO said on Thursday, pouring cold water on speculation Free could combine with a rival cellular operator.

"In 2012, we reported sales growth of nearly 50 percent, which shows that we have no need for an external deal to bring growth," Thomas Reynaud said on a conference call.

"It's not on the agenda," he added, referring to the merger rumors. "What counts for us is to win fixed-line and mobile market share, to install over the long term and to use our networks."

Speculation has focused on the possibility of a merger with SFR, the French telecoms unit of Vivendi, although a report by BFM Business radio station in January indicated that the country's antitrust regulator would oppose such a deal.

France's newest mobile operator, Iliad on Thursday said it had boosted its market share to 8 percent after gaining 5.2 million customers last year, putting further price pressure on larger rivals.

Iliad posted an increase of nearly 50 percent in full-year sales to 3.15 billion euros ($4.1 billion), compared with a forecast of 3.08 billion, according to the average of analysts polled by Thomson Reuters I/B/E/S. (Reporting By Catherine Monin; Writing by Christian Plumb; Editing by Elena Berton and Hans-Juergen Peters)

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