Virgin Mobile USA's second quarter profit jumped despite continued subscriber losses and lower revenues. The prepaid MVNO, which Sprint Nextel is set to acquire for $483 million, had net income of $17.2 million in the quarter, up from $3.5 million in the year-ago quarter. Virgin Mobile CEO Dan Schulman, who will run Sprint's prepaid operations once the deal closes, said that Virgin's financial performance exceeded expectations.
Revenue: The company's overall revenue fell 3.8 percent to $307.6 million, down from $319.8 million in the second quarter of last year. Service revenue came in at $290 million, down slightly from $293.8 million in the year-ago quarter.
Net adds: Virgin Mobile lost around 269,000 net subscribers in the quarter, more than double the 111,000 it lost in the second quarter of last year and notably up from the 133,000 it lost in the first quarter. Virgin had 536,000 gross adds, down 26 percent from the year-ago quarter. Schulman said the carrier would continue to focus on its hybrid plan customers. In the second quarter, 63 percent of Virgin's gross adds were hybrid plan customers, up from 55 percent in the first quarter. Schulman said the carrier's $50 unlimited calling plan, which it unveiled in April, represented 21 percent of all gross adds in May and June.
Churn: Churn decreased to 5.3 percent, down from 5.6 percent in the year-ago quarter, and up from 4.8 percent in the first quarter.
ARPU: Average revenue per user in the second quarter declined to $18.98, down from $19.49 in the second quarter of last year and down from $20.08 in the first quarter of 2009.
Schulman said that data usage continues to be a boon for the carrier. "People are buying our higher-end handsets, and adding messaging and data packs on top of that," he said in an interview with FierceMobileContent. "Social networking is still a phenomenon, of course--we've spent a lot of time and effort on our interfaces into various social networks, like Facebook, MySpace and Twitter. Data increased to 22 percent of our revenues in the quarter, and as I look forward, I see no stopping those trends."
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