But it has also announced up to 2,000 jobs are to go as part of its cost-cutting programme.

In addition, the group warned that the launch of third generation (3G) mobile services outside the UK would be delayed.

Orange, which floated on the London and Paris stock markets in February 2001, announced that its chief executive Jean-Francois Pontal would retire in the spring.

Profits at a price

The company, 88% owned by struggling France Telecom, told investors: "The acceleration of Orange group's performance this year is set to continue."

But this will come at a price.

A spokesman for the group told BBC News Online that between 800 of the proposed job cuts had already taken place - mainly in the UK and Denmark - with between 1,000 and 1,200 more jobs to be axed across the group during the next 12 months. Orange operates in 21 countries.

On Wednesday, the French government agreed a 9bn euro (�5.73bn; $9.0bn) rescue package for France Telecom as part of plans to halve the company's huge 70bn euro debt pile by 2005.

However, chairman Thierry Breton said the company would hold on to its Orange mobile phone business.

Bright future?

Orange credited increased earnings and lower spending for its upbeat projections and estimated that it would "generate net cash flow over the period 2003 to end 2005 some 5-7bn euros higher than the current market consensus".

The delay to the company's 3G roll-out outside the UK meant it would be spending �2bn less than anticipated on new equipment over the next two years.

The company told BBC News Online that the UK 3G launch was still on track for 2004, with other countries to "follow the UK lead", but at a later date than originally anticipated.

Mr Pontal, whose successor will be announced in early 2003, said:

"The strategy that has enabled us to increase our financial targets this year will continue to produce substantial out-performance.

"We are now able to reinforce this as we build upon our leading position within our existing footprint."