Virgin mobile USA has become a billion dollar-a-year company in just five years, though it was still $36 million in the red for 2006. That was one of the disclosures the youth-focused mobile service made in filing for a $100 million IPO in May. The prospectus also contained some other intriguing nuggets.
In 2006, Virgin Mobile boosted ad and media spending by $21.8 million, driven by new pricing offers and distribution channels. Virgin says its “focused media strategy” meant it spent under $10 on advertising per new customer vs. $100 for Verizon Wireless. But its overall costs per new customer increased last year to $120.55 from $118.62 in 2005.
As part of its effort to appeal to young consumers, Virgin is expanding its concert festival to two days this year. Modest Mouse and the Police are performing.
The company also noted that its Sugar Mama program, which gives users free airtime in return for watching ads, had 336,000 users at the end of March 2007. Overall, the mobile service, jointly owned by Sprint Nextel and Virgin Group, had some 4.9 million customers.