Shareholders frown on Virgin Mobile USA’s continued losses

Virgin Mobile USA Inc. reported that it added 210,000 customers in the final quarter of 2007; however the MVNO will be taking on a loss of $3 million to $6 million for the year.
The five-year-old company added 512,000 customers to its rolls in 2007, bringing its total subscriber count to nearly 5.1 million customers by year’s end.
Virgin Mobile experienced a churn of 5.1% during the fourth quarter and an annual average churn rate of 4.8%.
The company reported earnings of $95 million to $100 million for 2007, representing a 98% spike from 2006.
“We believe that sustainable, disciplined customer acquisition will result in higher return on investment and growth over the long term,” CEO Dan Schulman said.
The carrier purposefully avoided cutting prices on its handsets during the final months of the year, Schulman added. The company has suffered Wall Street’s wrath before on economic concerns with that business model.
“Our experience tells us that this temporary, aggressive pricing can produce poor customer economics,” Schulman said.
Company stock was down more than 13% to $6.99 on the news.