Hybrid plans galvanize Virgin Mobile USA's Q1 growth

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 [1] for 55 percent of Q1 customer adds, and said its new "Totally Unlimited Calling" and "Texter's Delight [2]" 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 [3]