Iliad SA (ILD.FR) stock rose nearly 6% Thursday after it struck a roaming deal with France Telecom SA (FTE) that will give it access to the telecoms giant's third-generation mobile network, resolving a major hurdle for the French internet provider as it prepares to enter the cell phone market in 2012.

Striking a 3G roaming pact with one of the country's bigger mobile operators is crucial for Iliad, which is preparing to launch cell phone services in 2012 after winning France's fourth third-generation mobile license in 2009. Using France Telecom's network will allow Illiad to offer subscribers faster data services on smartphones until its own network is fully operational.

In return, the 3G roaming deal will bring France Telecom EUR1 billion in revenue over six years, a France Telecom spokesman said.

France's three existing mobile operators -- France Telecom, Vivendi's (VIV.FR) SFR, and Bouygues SA's (EN.FR) Bouygues Telecom -- had been reluctant to negotiate a 3G roaming deal with Iliad, who had pledged to slash prices on mobile communications. Competition among existing operators has heated up over recent months as Iliad's move into mobile approaches.

The agreement will take effect once Free Mobile, Iliad's mobile phone unit, covers 25% of the French population with its mobile network. Free Mobile has committed to have a mobile network that covers at least 90% of the country's population ready by 2018.

French telecoms regulator Arcep said the agreement will inject a "new dynamic" into the French telecoms market.

At 1534 GMT, shares in Iliad traded up 5.8% while France Telecom shares were trading down 1.4% at EUR15.73 amid a higher Paris market.

-By Ruth Bender, Dow Jones Newswires; +33 1 4017 1754; ruth.bender@dowjones.com

(Inti Landauro contributed to this report)