However, the bullish statement did little to disguise the fact that tough competition and regulatory price cuts have hurt average revenues per user, and the rate of customer growth slowed sharply during the past three months.
The number of active customers grew 21% over the last year from 3.4 million in June 2004 to 4.1 million at the end of June. In May when the operator reported its year-end figures, the UK-based virtual mobile operator insisted it had not been affected by a broader slowdown in consumer spending on the high street, and was still recording growth rates of 24%.
For the year ending March 31, net income increased 27% to 22.4m pounds ($40.7m), from 14.8m pounds ($27m) the previous year. Sales increased to 521.3m pounds ($949m) from 453.3m pounds ($825m) in fiscal year 2004.
Virgin Mobile is predominantly a pre-pay business aimed at the youth market. However, it recently unveiled a contract service. The operator does not own a network, but instead rents capacity using T-Mobile’s infrastructure.
It said that during the past three months it has won 77,000 net active customers (defined as customers who have used their SIM cards in the last 90 days) compared with about 150,000 in the same quarter last year.
ARPU figures slipped to 123 pounds ($213) from 127 pounds ($220), while service revenues rose 6.8%, well below the mid-teen full-year growth. More worryingly, customer churn, when customers switch to rival service providers, rose to 24% from 22.6% in the previous quarter.
