Shares in mobile phone operator Orange have performed pretty well in recent months as it continues to outperform some of its rivals in key markets such as the UK.

The appointment of a new management team last week was greeted with confidence by investors, pushing its shareprice up to the £5 sterling level in London.

Mr Solomon Trujillo may have been a surprise appointment as chief executive but he has been on the Orange board since 2001. His declared goal of boosting efficiency could produce stronger margins at the firm, a move that should benefit shareholders.

Intelligent branding and a quirky corporate culture are already proving their worth at Orange which continues to generate strong cashflow for its indebted parent France Telecom.

The firm met market forecasts with a 7.9 per cent rise in fourth-quarter revenues to €4.542 billion, after netting 1.1 million new customers over the Christmas season.

But falling subscriber numbers in some markets such as the Netherlands, Belgium and Denmark, and average revenue per user figures were not strong in France.

A further concern is the sheer weight of France Telecom's debt burden. France Telecom owns 85 per cent of Orange and it may be tempted to cut back too stringently on Orange, slowing its growth.

Orange's decision this week to renegotiate its third generation mobile network investment demonstrates just how critically it is looking at its capital expenditure.