For Q2 2008,, Virgin Mobile USA reported net service revenue of $291.4 million, a decrease of 5.9% versus the same period last year. Virgin Mobile USA's net service revenue for the first half of 2008 was $595.1 million compared to $632.1 million in the same period in 2007.
The company said revenues in the first half of 2007 benefited from the launch of hybrid monthly plans, while second quarter 2008 revenues continue to be impacted by the effect of the current economic environment on prepaid customer usage, as well as by the industry-wide trend of substitution of lower-priced messaging for voice.
Virgin Mobile USA's net income for the quarter ended June 30, 2008 was $3.5 million, compared to net income of $7.1 million for the second quarter of 2007.
Some key metrics:
- As of June 30, 2008, the company had approximately 5.0 million customers, an increase of 3.4% over June 30, 2007.
- Gross additions, or new Virgin Mobile USA customers who activated their accounts during the second quarter of 2008, totaled 728,370, down from 785,236 in the second quarter of 2007. Gross additions for the first half of the year were 1,523,945, down 8.6% from 1,666,992 in the first half of 2007.
- The company's cost per gross addition (CPGA) for the second quarter of 2008 was $113.38, compared to CPGA of $100.03 in the second quarter of 2007. CPGA for the first six months of 2008 was $114.53, compared to $99.32 in the first half of 2007. Higher CPGA in the first half of 2008 was related to an incremental spend of $13.3 million in marketing and distribution related to the launch of new service plans as well as the decline in gross additions.
- Second quarter 2008 average monthly customer turnover, or churn, was 5.6%, below company estimates and slightly better than churn of 5.7% in the second quarter of 2007.
- Average revenue per user (ARPU) for the second quarter of 2008 was $19.32, reflecting a 7.9% decline from the prior year's second quarter ARPU of $20.97. ARPU for the first six months of 2008 was $19.63, a 9.5% decline compared to $21.68 for the same period last year. This decline was the result of lower customer usage of the traditional prepaid, or pay as you go, plans as well as an industry-wide trend of the substitution of lower-cost messaging for voice.
http://www.virginmobileusa.com
