MOBILE phone operator Orange boosted revenues in the UK in the past six months, but lost 54,000 customers.

The French-owned group saw total revenues in its UK business fall by 0.6 per cent. But the figure is measured in euros and suffered because of currency weakness. The company said a constant exchange rate would have given a revenue rise of 9.5 per cent in the half year to June 30.

Its domestic customer levels declined about 0.4 per cent to 13.3 million against the same period last year.

Orange, which employs 5,500 staff in the North-East, said the reduction resulted largely from its policy of discounting customers who failed to use their phones above a minimum level in the past six months, as well as customers going elsewhere.

Overall, the group saw total revenues rise seven per cent to £6.1bn, helped by a strong performance from its worldwide operations.

A spokeswoman defended the group's policy of not counting customers whose phone use falls below certain levels.

"We are focusing on people who actually use their phones, which is why revenues are up," she said.

Last month, Orange set out a strategy to drive up profits, including proposals to work with European rivals.

The company, which operates in 18 countries, said it was hoping to increase group underlying profits between 15 per cent and 17 per cent each year until 2005.

Chief executive Sol Trujillo, who took the helm at the end of March, said yesterday's figures showed the group was establishing a sound financial and operating platform on which to execute the strategy.

Mr Trujillo said the company was on course to meet its target of five per cent revenue growth this year.

"Today's results clearly demonstrate we are on the right track," he said.

The group's worldwide customer base rose 1.3 million to 45.6 million in the first half.

Orange said its French division recorded 4.7 per cent total revenue growth after an impressive second quarter.

Average revenues per user in Orange's UK operations rose 6.8 per cent to £267 and stabilised in France at £266.

While it did not give an equivalent figure for the rest of world operations, operating income doubled and revenues rose 19.5 per cent on the previous year to £1.4bn.

The worldwide division generated more than 90 per cent of the group's total customer growth in the first half.