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Virgin Mobile reveals mixed Q1 results

May 8, 2008

Virgin Mobile releases mixed Q1 results

Virgin mobile has released a mixed set of financial results for quarter one 2008, which shows a 59,400 increase to it contract customer base, but a decrease of 127,600 to its prepay.

The results also show decreased numbers in ARPU which in Q1-2008 was £10.04 from Q1-07 at £10.07 which Virgin claim is partly down to improved contract offers, but mainly due to increased competition.

Virgin Media CEO Neil Berkett said: “We are undertaking actions to improve mobile prepay performance including selective price increases, better focused customer retention activity and efforts to reduce customer acquisition costs.”

Mobile revenues for Virgin in Q1-08 were £139.5 million comprising £134.5 million in service revenue down from £151.6 million in Q4-07, and £5 million equipment revenue down from £9.6 million in Q4-07. Virgin say the repeated decline in service revenue is due to higher pre-pay churn and lower pre-pay ARPU.

Mobile operating cash flow (OCF) decreased from £26.7 million in Q1-07, to £17.2 million in Q1-08, due to an increase in equipment costs related to higher handset volumes and increased promotions such as bundled texts and minutes.