MOBILE phone operator Orange plans to team up with European rivals in an attempt to drive up profits.

Orange, which is majority owned by France Telecom, said it is to join forces with Telecom Italia Mobile, Spain's Telefonica Moviles and Deutsche Telekom's T-Mobile to allow customers to access services across each other's networks.

The group also said that it was setting a target of increasing underlying profits by between 15 per cent and 17 per cent each year until 2005.

Orange, which operates in 18 countries, said it would take steps to integrate its operations in different countries and apply new methods in dealing with information to get the most out of customers.

The changes are not expected to affect Orange's 5,500 employees in the North-East.

In his first strategy update since taking over at the end of March, the company's chief executive Sol Trujillo also set tough standards which operations in each country will have to meet in order to avoid being sold.

He said he wanted to see Orange's national operations breaking even at an underlying level by the end of this year, and be "cash flow positive" by next year.

Also, by 2005, all national Orange operations will have to be ranked first or second in the country, or have at least 20 per cent of the market in order to avoid being sold.