News 2001
Virgin Mobile to go into profit in 2002
04/11/2001
World's largest virtual operator exceeds growth and performance targets
First full year accounts in line with expectations
Virgin Mobile, the UK's fifth network, is on target to go into long-term profitability in early 2002, the company announced today. The company is among the fastest-growing in terms of customer growth, and its low-cost, efficient virtual operator model has enabled it to accelerate to profitability ahead of schedule - Virgin Mobile was EBITDA positive for the month August just past - and it is now in a position were its operating costs, except for acquisitions, are covered by revenues.
The company is pleased to report a successful first full year of trading, for the year to 31st December 2000. In line with expectations, turnover was £76 million and losses for the twelve months were £107 million.
Highlights for Virgin Mobile throughout the year included:
Meeting investment and employment targets
- With the investment funds from shareholders One 2 One and Virgin, the company had created 1,000 jobs in the UK by the end 2000. Approaching the end of 2001, it now employs just under 1,400 people.
Establishing itself as the fastest growing mobile start up ever
- Just seven weeks after launch in January 2000, the company began the year with more than 90,000 customers. Using an unsubsidised handset business model, it attracted its 500,000th customer on its first birthday in November 2000 and more than a quarter of a million joined the Virgin Mobile network during the fourth quarter of that year. The 12-month period ended with 674,943 customers - an annual growth of nearly 650% - making Virgin Mobile among the fastest growing mobile start-ups ever seen in the world.
Hitting profitability targets ahead of schedule
- In November 2000, Virgin Mobile successfully raised a £115 million syndicated loan through JP Morgan. This led to the company hitting profitability ahead of target in August 2001 - an unprecedented position for a start-up.
- The fully-funded company is expected to go into long-term profitability in Spring 2002.
Leading the way with innovation
Since launch and as part of activity throughout 2000, Virgin Mobile has pioneered a number of both technological and consumer-led initiatives in the mobile market. Industry firsts for the year 2000 included:
- The first in the world to launch a GSM MP3 phone
- The first to trial mobile vending in the UK
- The first to offer m-commerce services to all customers via VirginXtras, irrespective of their handsets.
Achieving exceptional sales through Megastores, V. SHOPs, Our Price and the web
- At the end of 2000, Virgin Megastores, Our Price and V. SHOPs accounted for more than two thirds of Virgin Mobile's sales during the year, putting these outlets among the top-performing mobile phone retailers in the country. In addition to this, around one in ten customers bought phones online. Comparing this to the size of the company's customer base, Virgin Mobile carries out more web-based customer transactions than any other UK mobile operator.
Successful expansion into 3rd party distribution channels
- In October 2000 Virgin Mobile began expanding its distribution outlets, initially to the supermarket chains and other high street retailers such as WH Smith and John Lewis. At the end of 2000, over 3,500 retail outlets offered Virgin Mobile service to its customers - up by a factor of 10 on January. A year later in 2001, and as a result of Virgin Mobile's success in third party retail outlets, Virgin Mobile has further expanded its business into independent mobile phone retailers including Carphone Warehouse, The Link, Argos and Phone People. Now the company has a presence in nearly 6,000 retail outlets throughout the UK.
- These strategic moves have widened Virgin Mobile's presence, added to its credibility and allowed potential increases to both its volumes and revenues.
Winning
- As a direct result of its success, Virgin Mobile was honoured with the following industry awards during the year 2000: Best Network of 2000 - Mobile Choice Awards, Best PR, Marketing and Advertising Campaign 2000 - Mobile New Awards and Best New Product Campaign 2000, for VirginXtras - Advanced Card Awards.
Establishing itself as the UK's fifth mobile network
- Its success as both an MVNO and a core player in the telecoms market has led to Virgin Mobile being established in the industry as the UK's fifth mobile network.
The report and accounts in respect of the year ended 31 December 2000 have been filed in accordance with the rules governing a Limited company.
Tom Alexander, chief executive officer, at Virgin Mobile said: "Virgin Mobile has proved itself to be a key player in the mobile industry, outstripping all forecasts for the year 2000. This is particularly impressive given the market dominance of the already established four network operators and the amount of money they spend on advertising compared to Virgin Mobile. We rapidly entered the nation's consciousness as the fifth network operator, known for offering a truly compelling, value-for-money alternative to consumers, a proposition we believe will pave the way for many more years of success."
For further information on Virgin Mobile:
Steven Day, Virgin Mobile, 07931 777777
Alison Bonny, Virgin Mobile, 07802 430 276
Debra Burtt, Consolidated Communications, 07941 200 300
Email: press.office@virginmobile.com
About Virgin Mobile:
Virgin Mobile is now established as the most successful virtual network operator in the world, and is the UK's fifth network. Since its launch in November 1999 it has attracted 1.2 million customers, making it one of the fastest growing mobile phone companies in history.
Virgin Mobile is a 50:50 joint venture company between Sir Richard Branson's Virgin Group and Deutsche Telekom's One 2 One, and is the UK's first mobile virtual operator.
It has scored a number of firsts, including being the first operator to scrap peak rate calls, introduce a daily discounting tariff and was the first company in the world to introduce an integrated MP3 mobile phone.
In the UK, Virgin Mobile phones are available direct on 0845 6000 600; on the web at www.virgin.com/mobile; or on the High Street at over 6,000 outlets including Virgin Megastore, Our Price, V.SHOP, Carphone Warehouse, The Link, Argos, The Phone People, Sainsbury, Tesco, WH Smith, Co-op, Asda, Somerfield, John Lewis, Littlewoods and Morrisons.
