French Court Rejects Free's Demand For New Rules In 4G Auction

France's highest administrative court Wednesday rejected a request by French telecommunications firm Iliad SA (ILD.FR) to change the terms of an upcoming auction of fourth-generation mobile frequencies.

The judge ruled Iliad failed to demonstrate the auction rules would significantly hurt the French company's interests, or change the market's competitive structure, according to a statement.

A spokeswoman for Iliad declined to comment immediately.

Iliad SA's Free brand contested the terms of the auction, arguing that requiring an upfront payment for the licenses handed the advantage to companies with deep pockets.

Iliad competes with larger rivals SFR, owned by Vivendi SA (VIV.FR), and France Telecom SA (FTE).

Obtaining 4G spectrum--which allows for faster downloads on handsets--is crucial for operators eager to exploit a recent explosion in mobile data traffic. Operators are due to submit bids for the spectrum this month.

The French government is hoping to raise at least EUR2.5 billion from the auction.

-By Noemie Bisserbe, Dow Jones Newswires; [phone]; [e-mail]