Virgin struggles for connections

[3GScottishUser]

Virgin Mobile struggled to compete with its rivals for new customers last year. The operator's net customer additions for the final quarter of 2006 slumped to just 11,100, compared with over 192,000 in the final quarter of the previous year.

The mobile business ended the year with 4.5 million customers, up from 4.3 million in 2005.

Virgin warned that net customer additions in the first quarter of 2007 will be 'significantly negative', reflecting a post-Christmas dip.

The network blamed its lower-than-expected customer growth on increased price competition and higher advertising spend from mobile customers.

Virgin, bought by NTL in July, said it 'continued to grow the number of higher ARPU and more valuable contract customers, as well as overall revenue'.

ARPU rose to £10.59 from £10.28 during the last quarter.

Revenue in the quarter was £151.7m, up slightly from the previous quarter's figure of £140.4m.

Mobile operating income before depreciation, amortisation and other charges was £14.2m in the fourth quarter, down from £16m in the previous quarter.

The business said it expected good subscriber growth for 2007 and would focus on the 'reinvigoration of our “value” marketing messaging', growing its contract business, and cross-selling to its cable customer base.

Virgin plans to open around 20 new stores this year, but is pulling out of 19 concessions in WHSmith shops.

Meanwhile, parent company Virgin Media lost its battle with Sky, which pulled its basic channels from Virgin Media after a deal for a new carriage agreement could not be reached.

Virgin is taking its battle with Sky to the high street by agreeing a deal with Sky's major third-party retailer, DSG, under which the Currys Digital stores will be the first third-party retailer to sell Virgin's group products.

Virgin is also close to agreeing terms with Comet.

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