Hybrid plans galvanize Virgin Mobile USA's Q1 growth

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Virgin Mobile USA reported first quarter net income of $19.1 million, a 301 percent year-over-year increase compared to Q1 2008 income of $4.7 million. The MVNO posted total operating revenues of $337.3 million, up 2 percent year-over-year. Gross customer additions in Q1 totaled 630,259, compared to gross customer additions of 795,575 in the first quarter of 2008, a decline Virgin Mobile credited to the impact of competitive launches during the quarter as well as its stated strategic focus on high lifetime-value customer acquisition--as of March 31, the firm now boasts approximately 5.2 million customers. Virgin Mobile USA cited hybrid plan growth for 55 percent of Q1 customer adds, and said its new "Totally Unlimited Calling" and "Texter's Delight" pricing plans are expected to stimulate further subscriber growth in the second half of the year. First-quarter churn was 4.8 percent, a 30 basis point improvement over year-ago totals.

Virgin Mobile USA subscriber ARPU for the first quarter was $20.08, virtually flat compared to ARPU of $20.14 in the first quarter of 2008 and a 5 percent decrease from $21.14 in Q4 of 2008. According to the MVNO, the sequential decline in ARPU is a result of the ongoing decline of voice minutes and corresponding growth in messaging--Virgin Mobile reports Q1 messaging traffic increased 26 percent quarter-over-quarter, adding that mobile data now represents 22 percent of total net service revenue, a 2 percent jump over Q4.

For more on Virgin Mobile USA's Q1 results:
- read this release

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