Virgin Mobile USA pre-announced weak fourth quarter results with net additions of 210,000 and a churn rate of 5.1 percent. Pali Research analyst Walter Piecyk had expected the MVNO to post about 360,000 net new subscribers and a churn rate of 5.4 percent. Virgin Mobile USA claimed that increased handset pricing pressure from AT&T and T-Mobile USA and Leap's recent $25-per-month promotion plan as reasons for the weaker than expected results.
"Verizon and AT&T have already been increasingly successful in pre-paid by offering free unlimited in-network calling for its customers including calls to post-paid customers," Piecyk wrote in a research note. "The success has offset a slowdown in their post-paid subscriber growth. If Sprint gets more aggressive in pricing on the post-paid side of the business it could lead to Verizon and AT&T leaning more heavily on the pre-paid market."
For more on Virgin Mobile USA's results:
- read this press release
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