News 2002
Virgin Mobile Now In Profit
09/05/2002
- World’s largest virtual operator exceeds growth and performance targets
- Second full year accounts ahead of expectations
Virgin Mobile, the UK’s fifth network, has moved into profit ahead of plan, the company announced today.
The company achieved both EBITDA and PBIT profits in the first three months of 2002, with all key performance indicators positive to budget. The company is the UK’s 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.
After a successful first quarter, Virgin Mobile showed an EBTIDA profit of £3.4 million - £3.9m ahead of plan. The bumper quarter saw customer numbers increase to 1,609,700 - 64,000 ahead of plan, with net connections increasing by 164,223.
Virgin Mobile forecasts that by the end of 2002 it will have in excess of 2 million customers, and a positive EBITDA over £11m.
The company is also pleased to report a successful second full year of trading, for the year to 31st December 2001, with revenues more than doubling.
Highlights for Virgin Mobile in 2001 included:
Critical mass achieved for move into profitability ahead of schedule
- In August 2001 Virgin Mobile had its first EBITDA positive month, five months ahead of plan, achieved by strong financial, operational and sales performance.
- Over the twelve months, revenues increased by 128% to £174m, operating costs were down 1% year on year, and EBITDA losses for the year fell by 61% to £35.7m.
Successful expansion into key mobile specialists
- In October 2001 Virgin Mobile began expanding its distribution network to include key mobile specialists such as Carphone Warehouse and The Link. This, combined with expansion into major retailers like Argos and the Dixons Stores Group, meant that at the end of 2001, over 5,000 retail outlets offered the Virgin Mobile service to customers.
These strategic moves have widened Virgin Mobile’s presence, added to its credibility and led to increases to both its volumes and revenues.
Establishing itself as the fastest-growing mobile start up ever seen in the UK
- Using its innovative, unsubsidised handset business model, the company began the year with 674,943 customers. By June it had attracted its 1,000,000th customer and more than a quarter of a million (264,359) joined the Virgin Mobile network during a busy fourth quarter – figures that beat Orange, O2 and T-Mobile during this period. The year ended with 1,445,492 customers using Virgin Mobile, up by 114%.
Leading the way with innovation
- Towards the end of 2001 Virgin Mobile became the first British operator to launch a voice portal. The service, simply controlled by speech commands, gives all Virgin Mobile customers access to a menu of audio-on-demand content, including on-the-hour news bulletins, sport and celebrity interviews, as well as TV soap updates, and much more.
Winning
- As a result of its success, Virgin Mobile was honoured with the following awards during the year 2001: Best Pre Pay package and Best Customer service at the Mobile Choice Consumer Awards 2001.
The report and accounts in respect of the year ended 31st December 2001 have been filed in accordance with the rules governing a Limited company.
Virgin Mobile’s Sir Richard Branson said: “Virgin Mobile has proved itself to be a great success – both with consumers and as a business pioneer in mobile telecommunications. Our virtual operator model is a profitable model, and it is a business with an exciting future. We’re delighted to be operating in profit ahead of plan, to have had such a successful year last year, and to be enjoying a great start to 2002. We’re particularly proud because we’ve done all this in a market which has seen mobile growth fall by a factor of five over the past year.”
