Virgin Mobile touts net adds in tightening economy: MVNO scores 216,000 net subscriber additions

Virgin Mobile USA Inc. released “selected” – meaning positive and unaudited – metrics today, and suggested that the troubled economy was sending mobile subscribers into its arms.
The low-cost wireless provider isn’t due to report full financial results until March 3. Today’s word on subscriber additions, however, preceded an investor conference tomorrow, the 2009 Citi Global Entertainment, Media and Telecom Conference in Phoenix.
The MVNO said it gained 216,000 net subscriber additions in the fourth quarter. Churn was 4.8%. The company ended the year with nearly 5.4 million subscribers, which included customers gained in Virgin Mobile’s August acquisition of rival MVNO Helio.
The numbers are notably better than the Virgin Mobile’s third quarter results; the MVNO lost more than 3,000 customers during the period, and posted churn of around 5%.
The holiday season had been forecast as a challenge for MVNOs in particular. Virgin Mobile had announced plans in November to cut its workforce by 10% after weak third-quarter results.
The New York Stock Exchange had notified the company in November that its market capitalization and stock price over a 30-day trading period did not meet listing criteria. The NYSE requires a $100 million average market cap and $1 average stock price for the 30-day period, which Virgin Mobile did not meet.
Dan Schulman, CEO of Virgin Mobile USA, said that the MVNO’s “hybrid” service plans accounted for more than 50% of gross subscriber adds in October and November and patrons of those plans accounted for 29% of the firm’s subscriber base by the end of November.
Prepaid offerings such as those at Virgin Mobile have attracted consumer attention in a tightening economy. And plans that cap monthly service rates have gained in popularity as well. Virgin Mobile launched a “totally unlimited” service plan this year, including unlimited data use.
Virgin Mobile’s stock was down around 7% on the news to around 75 cents per share.