Virgin Mobile UK Loses Some Luster
The story of the Virgin Mobile MVNOs have been uniformly positive, with Virgin UK steadily releasing data regarding amazing customer acquisition rates, and dominance in the youth market. However, for the first time, Virgin may be losing some of its luster. Because of the Virgin Mobile UK IPO last month, the company was forced to re-state some industry metrics in conformance with UK clarity laws for telecom carriers. The re-statement of Virgin metrics revealed the carrier has previously counted 4.3 million subscribers, but in fact only 3.4 million of these are active users, meaning users who have used their accounts in the last 90 days. In fact, as the Virgin customer base matures, their quarterly losses through churn and inactive accounts are slowly catching up to their subscriber acquisitions. The problem is that Virgin has targeted the low-grade customer, who is always looking for the cheapest deal. There is little loyalty, which drives churn, and this type of customer also offers Virgin some of the lowest ARPUs in the country. However, this recent blast of bad news is an adjustment of our perception of Virgin Mobile, but not a condemnation. Even with the company's adjusted numbers, we still consider Virgin a smashing mobile market success.
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