Iliad Q3 revenue up 5 percent, driven by Free

PARIS, Nov 15 (Reuters) - French telecoms group Iliad ILD.PA, struggling to keep market share as larger rivals go on marketing offensives, reported a 5 percent rise in third-quarter revenue as growth at its Free brand offset weakness in Alice.

Iliad, which sells low-cost bundles of TV, internet and fixed-line telephony in France, said on Monday third-quarter revenue rose to 511 million euros ($696 million).

The company, which does not offer mobile phone services, has been struggling against larger rivals Bouygues Telecom BOUY.PA France Telecom FTE.PA, and Vivendi VIV.PA unit SFR which have all started selling "quadruple-play" bundles with mobile, fixed-line, broadband and TV.

As a result, France Telecom signed up almost 100,000 new customers to its quad-play offer in the third quarter, helping it win a third of new broadband customers, a closely watched metric. [ID:nLDE69K1OM]

Over the same period, Iliad signed 36,000 new clients, a slowdown from 125,000 in the first half. [ID:nHUGCEESMa]

Iliad said it had 4.53 million broadband subscribers as of the end of September, with nearly 4 million on Free.

Its Alice broadband unit continued to struggle, with sales down 15.3 percent to 64.4 million euros.

Iliad acquired Alice from Telecom Italia (TLI.MI) in 2008 and has been battling customer losses in the unit.

Iliad, awarded France’s fourth mobile phone license last December, has been building a network aimed at a launch by 2012. (Reporting by Nina Sovich; Editing by Dan Lalor) ($1 = 0.7344 euro)