UPDATE 1-Iliad posts 11 pct rise in Q1 sales

Thu May 15, 2014 3:04pm EDT

(Adds background, detail on consolidation)

PARIS May 15 (Reuters) - French low-cost telecoms company Iliad posted an 11 percent rise in first-quarter sales on Thursday thanks to a surge in mobile revenue.

Iliad said it signed 595,000 new mobile subscribers in the period, taking the total to 8.64 million. Including broadband subscribers, the total grew to 14.3 million. Quarterly sales reached just over 1 billion euros ($1.37 billion).

"This robust revenue growth was primarily driven by strong sales momentum for the group's mobile offerings," Iliad said in a statement.

Mobile contributed a 26 percent rise in sales to 370 million euros, while fixed-line revenue edged 3.6 percent higher to 640 million.

Iliad, which has far less spectrum than rival domestic operators Orange, Bouygues Telecom and SFR, has waged a price war in the sector, helping it win customers. It said its share of the French mobile market rose to about 13 percent at the end of March from 12 percent as of Dec. 31.

The telecom groups are pursuing tie-ups in the wake of this increased competition, with the French government this week pledging to return to three mobile operators instead of four.

Bouygues Telecom earlier this year lost out to cable operator Numericable in a battle to buy Vivendi's SFR. Unions have written to Prime Minister Manuel Valls to call for Orange and Bouygues Telecom to merge to save jobs at the latter. Les Echos newspaper said the two were in deal talks.

As part of its proposal to buy SFR, Bouygues Telecom had proposed to sell 15,000 mobile antennas and some of its mobile spectrum to Iliad for up to 1.8 billion euros to head off competition regulators' concerns. Les Echos said this plan still applied should Orange buy Bouygues Telecom.

($1 = 0.7291 Euros) (Reporting by James Regan; Editing by Maya Nikolaeva and David Evans)