Virgin Mobile Cuts Losses, Credits Prepaid Service Plans
Fourth-quarter financial report is also good news for Sprint, which provides much of Virgin Mobile's infrastructure -- and competes with it for prepaid plan business.
The tough economic environment seems to be a positive for Virgin Mobile USA, which has announced a reduction in its fourth-quarter financial losses and a growing customer base. The company reported a loss of $4.4 million versus a $14.7 million loss in the previous year's fourth quarter.
"During difficult economic times, we believe that our service plans are even more relevant to consumers," CEO Dan Schulman said in a statement as he referred to Virgin Mobile's prepaid wireless service offerings.
In announcing its financial report Tuesday, the company noted that it had surveyed its customers and asked them how they're coping with the current economic conditions. "Over two-thirds of those surveyed feel that Virgin Mobile USA saves them money," the company said.
Virgin Mobile added 216,000 new customers, bringing its customer population to 5.4 million. The customer base was also inflated by Virgin Mobile's acquisition of Helio last year. The upbeat report is likely good news, too, for Sprint, which provides much of Virgin Mobile's infrastructure.
Schulman also pointed to the company's midyear emphasis on hybrid service plans -- calling minutes offered without a contract -- as fuel for its positive growth. "The popularity of our postpaid and renewed hybrid service plans, launched midyear," he said, contributed to growth in the second half of the year while reducing churn.
Schulman indicated Virgin Mobile will seek to take advantage of the popularity of prepaid service plans by stepping up its marketing efforts. While prepaid plans are growing in popularity, they're also drawing intense competition from rival providers of prepaid plans, namely MetroPCS, Leap Wireless International, and Sprint's Boost.
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