• August 10, 2009

Virgin Mobile USA reported higher profits in the second quarter even as lost 269,000 net customers, more than double the total it lost in year-earlier period. The prepaid wireless service acquired last month by Sprint Nextel for $483 million had net income of $17.2 million in the quarter, up from $3.5 million a year ago. Revenue decreased slightly to $307.6 million.

The company said data now accounts for 22% of total net service revenue, compared to 18% a year ago. Helping to increase that proportion was the launch of its $50 unlimited calling plan in April. The new plan was responsible for 21% of Virgin Mobile's gross customer additions in the quarter.

"Supporting this strategic customer focus is the sale of higher-priced handsets, which are associated with higher data usage, better churn, and significantly higher lifetime value," said Virgin Mobile CEO Dan Schulman, in a statement. "Our sales of handsets priced at $50 and above leapt to 25% of total sales from 15% in just one quarter."

Through its acquisition of Virgin Mobile, Sprint will gain a commanding position in the prepaid phone market, where it already owns competing service Boost Mobile. Together, they represent about 10 million prepaid customers. -Mark Walsh