Virgin Mobile's prepaid wireless service delivered strong second-quarter profits of $16.8 million Monday even as the company reported a net loss of subscribers. The firm's profits in the second quarter last year were $3.5 million.

The company, which is being acquired by Sprint Nextel, said its $49.99-a-month unlimited plan has been particularly successful. The company said it expected the shift to the $49.99 plan likely will conclude by the end of the year.

"Our new $49.99 Unlimited offer has been particularly successful, representing 21% of all gross adds in May and June," said chief executive Dan Schulman in a statement. "Supporting this strategic customer focus is the sale of higher-priced handsets, which are associated with higher data usage, better churn, and significantly higher lifetime value." Schulman noted that handsets priced at least $50 represented 25% of total handset sales -- up from 15% in one quarter.

Virgin Mobile said it lost 269,239 net customers in the quarter and its churn turnover rate was 5.3% against 5.6% in the previous year's quarter.

The company said revenue for the quarter hit $307.6 million, a drop of 3.8% from the $319.9 million that it recorded in the 2008 second quarter.

Virgin Mobile has always had a close relationship with Sprint, which is taking over the pre-paid firm in a deal worth $483 million that was announced late last month. Sprint formed Virgin Mobile in 2002 in a joint venture with the Virgin Group. Sprint has been the long-time provider of the Virgin Mobile network.

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