Orange, which has been linked to a bid for rival Bouygues Telecom, said it will not be taking part in any consolidation moves in the French market for the moment.

The market leader said it had examined the possibilities on offer and concluded that “it cannot pursue this avenue at the present time as the conditions that the group has set have not been met”.

The brief statement leaves Bouygues Telecom, which has now unsuccessfully pursued deals with both SFR and Orange, with only smallest operator Iliad as a potential merger partner.

Reports surfaced six weeks ago that Orange was in talks about acquiring Bouygues Telecom. At the time Orange issued a statement that, without naming Bouygues, said it was exploring merger opportunities.

However, despite widespread support (including from the French government) for reducing the number of operators in France from four to three, no deal has been struck.

Meanwhile SFR is being acquired by Numericable, the country’s leading cable operator.

Bouygues Telecom is under financial pressure, but its parent company stands to receive a welcome cash boost from the sale of engineering firm Alstom, in which it holds a 29 per cent stake.

As part of the deal, the French government secured an option to buy 20 per cent of Alstom from Bouygues.

According to analyst comment, the funds might also strengthen the firm’s hand in negotiations with possible merger partners.

In addition, Bouygues is hoping an internal reorganisation – which combines job cuts with aggressive 4G rollout – might turnaround its business.