In a move to challenge larger competitors, seven smaller European mobile phone companies with networks in nine countries have banded together in an alliance to offer cross-border services to both business and private customers.

In addition to services, the new alliance will aim to leverage its combined strength to purchase terminals and other equipment, according to a statement released by mmO2, the UK mobile phone company that is spearheading the deal.

MmO2 owns mobile phone networks in the Germany, Ireland and the U.K. The British company will be joined by six other operators: Auna Telecommunicationes, Spanish mobile unit Amena, Austria's One, Hungary's Pannon GSM Telecommunications., TDC Switzerland's mobile unit Sunrise, Telenor ASA's Norwegian mobile unit Telenor Mobile and Italy's Wind Telecomunicazioni.

Together, the still-unnamed alliance has around 40 million customers, according to the statement.

The group hopes to strengthen its position against Vodafone Group, Europe's largest mobile network operator with over 80 million customers in nearly 30 countries, and another mobile alliance formed by Orange of France, Telecom Italia Mobile, Telefónica Móviles and T-Mobile International.

New services to be provided by the mmO2-led alliance include seamless GPRS (General Packet Radio Service) and MMS (Multimedia Messaging Service), short dialing codes and simple access to home services, such as voicemail. A prepaid "top-up" service will allow customers to quickly and easily top-up credit on their prepaid phone card when travelling in member counties, mmO2 said.

Corporate customers will benefit from competitive flat-rate pricing plans for voice and data services and also the ability to easily send and fetch e-mail and access corporate intranets while roaming on partner networks, the company said.