Fierce competition in the French mobile market looks set to continue after Orange on Wednesday said it has given up on trying to acquire one of its rivals.

"Orange has examined the possibilities of participating in an operation that would lead to consolidation in the French telecoms market, and believes that it cannot pursue this avenue at the present time as the conditions that the group has set have not been met," said a statement from the company.

Orange issued a brief statement in May extolling the long-term benefits that consolidation would bring to the sector as well as consumers.

The incumbent operator had reportedly been in merger talks with Bouygues Telecom, the country's third-largest player, and was said to have hired banks to advise it on a possible bid.

France's economy minister Arnaud Montebourg went so far as to express confidence that the mobile market would eventually consolidate back to three operators from four.

However, a source cited in a Reuters report on Wednesday claimed that the asking price for Bouygues Telecom was too high. In addition, Orange even included Iliad in the discussions in a bid to stave off potential regulatory objections, the source said, but the three parties failed to find any common ground.