PARIS--France's telecommunications industry is "in ruins" and one solution is to reduce the number of mobile operators to three from the current four, the French Economy Minister Arnaud Montebourg said Friday.

The minister said in a interview with BFM TV that there were currently "multiple talks" between the French mobile operators, following the acquisition of Vivendi's (VIV.FR) SFR by cable group Numericable SA (NUM.FR) in April, not only between Orange SA (ORA.FR) and Bouygues Telecom, but also involving others.

Orange, the former state monopoly, and Bouygues SA, the owner of Bouygues Telecom, Thursday said they were examining possibilities to tie-up with French rivals

The arrival of Iliad's (ILD.FR) Free mobile service in 2012 sparked a price war and led to layoffs. Now French phone companies are looking for the way back to growth at home.

Earlier Friday, France's Prime Minister Manuel Valls called for discretion and moderation in the face of "rumors, which by the way have been denied by those concerned."

"These are listed companies, hence moderation is needed," Mr. Valls said, added the French government's concern is to boost investment and employment and with such touchy and strategic industries, one must be discreet and not comment on rumors."

In what would be the latest piece of consolidation in the country's telecom market, Numericable also announced Friday that it was in exclusive talks to buy Virgin Mobile France in a deal worth EUR325 million ($445.77 million).

Numericable, which is owned by Altice SA, said it had entered exclusive negotiations with Omer Telecom Limited, Virgin Mobile France's parent company, to start consultations with employee representative bodies. Omer is 46% owned by Carphone Warehouse Group PLC, the U.K.-based mobile phone retailer.

-Ian Walker in London contributed to this article.

Write to Geraldine Amiel at geraldine.amiel@wsj.com

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