Last month Sprint made an agreement to acquire Virgin Mobile for $483 million. Shortly after that announcement, Virgin Mobile announced their second quarter profits. Virgin said that their popular $50 unlimited plan was the reason why second quarter profits were driven to $16.8 million. In terms of the number of subscribers, Virgin Mobile lost many of them. About a year ago, Virgin Mobile’s profits was only $3.5 million.
Virgin Mobile also said that they plan to shift away from the $49.99 plan 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,” stated Virgin Mobile CEO Dan Schulman. “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.”
The company lost 269,239 customers in the quarter. Revenue for the quarter was $307.6 million. In the same quarter the year before, the company reported $319.9 million.
Before the acquisition, Sprint and Virgin Group formed Virgin Mobile in 2002 as a joint venture. Sprint has been a primary provider of the Virgin Mobile network ever since.