French Industry Minister Eric Besson Monday set out the details of France's upcoming fourth-generation mobile spectrum auction, which should raise at least EUR2.5 billion for the government and shape the competitive landscape in Europe's third-largest telecoms market.

The government has set the minimum price for the frequencies, which will be divided into different lots, at EUR2.5 billion, Besson said in a speech during a visit to an Alcatel-Lucent SA (ALU) research lab outside of Paris. "...The strategic asset that these frequencies represent won't be sold on the cheap," Besson said, confirming earlier media reports.

France is currently finalizing the long-awaited auction process of the 4G spectrum, which should be launched at the end of the month, Besson said.

For operators it is crucial to get a share of the spectrum to be able cope with the rapid surge of data traffic on the web. The 4G frequencies will allow operators to upgrade their networks so that consumers can surf the Internet and download videos onto their mobile phones at high speeds, an increasingly important selling point for telecoms operators.

Once the tender offer is officially launched, operators have until September to file their bids and the government has set limits on how much spectrum one operator alone can bid for.

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

(Max Colchester from the Wall Street Journal contributed to this article.)