Orange France has reported that its first quarter sales in 2003 were up more than 5% against Q1 2002. Client contracts rose by 119,000 in the quarter, whilst pre-paid subscribers fell by 104,000, as the company attempts to migrate pre-paid users to more lucrative post-paid options. Contract clients are higher spending and less likely to alternate between operating companies, providing a more reliable source of subscriber income than pre-paid subscribers. Alongside revenue growth, this has offset the cellco’s low rate of addition. Analysts have commented that the first quarter figures are extremely unhealthy due the company’s policy of reducing acquisition costs in an attempt to boost margins. Only 64% of the French population own a cellular phone, giving France the lowest mobile phone penetration of any European Union country even though it remains Europe’s fourth largest mobile market.