Sebastien Soriano, head of France's Arcep telecoms regulator, told Le Monde newspaper on Tuesday that Arcep could be open to consolidation within the sector.

"Regarding the consolidation in the telecoms industry - Arcep's door is opening," Soriano told Le Monde.

"But (operators) must have a value-creating project for the country, and not for shareholders only."

Soriano took the potential merger of U.S. mobile companies Sprint and T-Mobile US as an example, stressing that the deal could lead to higher investments in the next generation of mobile internet, known as 5G.

Iliad shares rose by 3.4 pct at 0855 GMT, while the shares of market leader Orange advanced 2.8 percent. Bouygues, which runs Bouygues Telecom, climbed 3.2 percent.

The Shares of SFR's parent company Altice also rose sharply, but the move essentially reflected a technical adjustment of their price following the separation of Altice NV from Altice USA.

Altice USA's spin-off was formally approved at the group's shareholders meeting last week.

Several attempts to cut the number of French telecoms operators from four to three have failed over the last few years. The last move was in 2016, when Orange failed to acquire Bouygues Telecom.

Arcep published a report earlier on Tuesday that showed that in 2017, French telecom operators had invested an extra 660 million euros (578 million pounds) more than the previous year, for an overall total of 9.6 billion euros.

Separately, Arcep's head also said the regulator was opening a public consultation about the 5G radio frequencies, which he said should be granted between mid-2019 and mid-2020".

(Reporting by Blandine Henault and Sudip Kar-Gupta; Editing by Mathieu Rosemain)