Virgin Mobile loses subscribers in first quarter

Virgin Mobile took a bit of a hit. While they did manage 630,259 gross additions, once they factored in a 4.8 percent churn rate they were left with a net loss of 133,000 subscribers. Virgin remains optimistic on their outlook, noting that 55 percent of the gross additions were for hybrid plans, which is what VM wants. They’re looking to add “high lifetime value customers,” and apparently that starts with hybrid plans. This apparently has worked, as Virgin’s net income was up 301 percent from the first quarter 2008. So despite a net loss, Virgin has reason to be pleased with these results. Clearly they can’t continue losing customers like Sprint, but they can sustain a loss at this point, especially if it’s more of an optimization than a purge. Despite the losses they gained in almost every financial area, and are still up in terms of overall subscribers (5.2 million). Adding to Virgin’s optimism is CEO Dan Schulman’s statement that “well over half the population is willing to actively consider prepaid.” That seems like a bit much, and is probably skewed a little bit. Still, we’ve seen a media frenzy over prepaid since about November of last year, with the Associated Press and its member papers issuing a number of reasons why prepaid doesn’t have to be for people with bad credit. Virgin is also positing itself as a talk-text carrier, leaving the fancy “iconic” phones like the iPhone to postpaid carriers (perhaps even referring to the Ocean on their own Helio). Says Schulman of those who talk and text with frequency, but who don’t rely on data: “If that’s what you are primarily into, then prepaid has become a better deal than postpaid. From a per minute perspective, if you line up our suite vs. postpaid, we pretty much are better at every minute level now.” The second quarter of 2009 should be an interesting one. If Virgin is right in its optimism we should see continued increasing revenue, plus a decent level of net additions. We’ll also see how Metro and Boost come back to earth after big events (Boston & NY markets; Boost Unlimited) settle in.]]>