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By Ben King, 30 April 2002 15:30

NEWS Strong subscriber growth is the only bright spot in a gloomy quarter update from Orange as its parent, France Telecom, struggles to recover from the massive losses it unveiled last month. Orange UK added an impressive 284,000 customers in the first quarter of 2002, up 38 per cent from the previous quarter, which included the pre-Christmas period. Orange's French and worldwide business also posted an impressive number of new subscribers, bringing a total of 1.27 million new customers to the group. It now has 40.5 million customers worldwide. Increased subscriber numbers fuelled an increased turnover of E3.96bn (£2.47bn) for the quarter, up 16 per cent on the same quarter the previous year, but the key metric of revenue per user was more or less static. Annualised average revenue per user (ARPU) in the UK was more or less flat at £248 for the first quarters of 2002, the same as the 2001 figure. In France, the equivalent figure fell to E370 (£229) for Q1 2002 from E388 (£240) for Q1 2001. Mobile phone companies desperately need those ARPU figures to grow to justify their current stock market valuations, which still assume that the sector will be able to deliver impressive growth. Increasing use of data services will be the key to delivering this, as revenues from voice are declining. Orange UK saw its proportion of data revenues rise to 13.6 per cent for the quarter from 11.2 per cent from 2001, but this was largely delivered by SMS traffic rather than more advanced services such as GPRS. Orange's deputy chief executive, Graham Howe, predicted the increased revenues would come in due course. He said: "Step by step, we expect to see average usage and revenues to grow further as new services, handsets and other wirefree devices are launched. No-one should expect this to be an overnight success." The relatively strong results from Orange helped to boost France Telecom's overall performance. Fixed line revenues for the company were down at E4.77bn (£2.95bn) for the quarter, from E4.99bn (£3.08bn) for the same quarter the year before. France Telecom published its financial results for 2001 last month, unveiling a staggering E8.3bn (£5.1bn) corporate loss, the largest in French corporate history, as the group wrote off a series of investments.