Orange confirmed it is in preliminary talks with rival Bouygues Telecom about a possible merger in the French market.

Speculation over a possible deal between the two, which would create a joint entity with more than 50 per cent mobile market share, has been rife since the beginning of December, after Bloomberg first broke news of early discussions between the companies.

In a statement, Orange said the “discussions are not limited by any particular calendar and hold no commitment to any particular predefined outcome”.

“The group is exploring the opportunities available within the French telecoms market,” it added.

In its own statement, Bouygues also confirmed talks, while adding that it had today (5 January) signed a confidentiality agreement with Orange.

“For the moment, no decisions have been taken and there is no guarantee that there will be an outcome to these preliminary discussions. According to the progression of these discussions, more information will be disclosed in due course,” it continued.

Orange was previously linked to a bid for Bouygues Telecom in 2014, while market rival SFR Numericable also reportedly failed in its attempt to acquire the company last summer.

If talks between the Orange and Bouygues progress, the deal is likely to face antitrust hurdles, as well as political scrutiny in France, with the market shrinking from four players to three as a result.

French newspaper Journal Du Dimanche reported earlier this week that the tie-up could be worth as much as €10 billion, with Bouygues taking a 15 per cent stake in Orange worth €8 billion, while the remaining €2 billion paid is paid in cash.

Neither Orange or Bouygues revealed valuation information in their statements.