Virgin Mobile Reports Declining Revenues
Virgin Media, the parent company of the UK based MVNO, Virgin Mobile has reported that total mobile revenue in the quarter was £141 (US$281) million compared to £151.7 (US$302) million in the preceeding quarter.
The company says that the revenue decline was mainly due to seasonal factors leading to reduced mobile monthly ARPU, net customer losses of 61,300 and lower equipment revenue. The fourth quarter holiday season typically has high levels of customer additions and usage.
Virgin Mobile says that it continued to grow the number of higher ARPU contract customers, with net additions of 54,200 in the quarter compared to 8,400 in the same quarter last year as reported by Virgin Mobile prior to the acquisition. This was partly driven by the cross-sell to Virgin Media cable customers with 47,000 sales during the quarter. The high proportion of contract customer sales through direct channels and cross-sell contributed to lower acquisition costs.
The number of lower ARPU pre-pay customers fell by 115,500 during the quarter due mainly to lower gross additions as a result of seasonality, increased competitiveness in the market and up-selling of prepay customers to higher ARPU contract tariffs.
The company expects to continue to grow the number of contract customers in the second quarter, but again expect this to be outweighed by the loss of lower ARPU pre-pay customers.
Overall mobile service ARPU fell to £10.07 (US$20.07) in the first quarter (Q4 2006: £10.59) primarily because of a reduction in contract ARPU due to the popularity of their 4 for £40 bundled offer, which includes a discounted mobile contract to promote the sales of cable bundles, and seasonally lower pre-pay ARPU following higher usage in the fourth quarter."
Posted to the site on 9th May 2007