Virgin Mobile Hits $16.8 Million Profit In Q2

Posted Aug 12, 2009

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.

[via InformationWeek]