Sometimes more subscribers isn’t always better. The bad news for Virgin Mobile that they lost a net 269,000 subscribers in the second quarter. One would think it’s tough to find a silver lining in that, but it’s certainly there for them.
Beyond their acquisition by Sprint Nextel, Virgin saw a consumer shift to more profitable hybrid plans. This allowed their net income to rise while their operating revenue fell. So while Virgin is losing customers like its to-be parent company, at least Virgin is seeing those remaining customers migrate to plans which benefit the company.
It makes sense that hybrid plans — those which mimic contract plans by offering a set number of minutes for a fixed monthly price — would bring in more revenue. When balances run low, they’ll conserve, delaying the purchase of another top-up card. But with hybrid plans, the customer is already locked into a set amount monthly. That gives Virgin a steady income.
Over the next quarter, Virgin will likely focus on getting more customers on hybrid plans, even if it means losing subscribers overall. Perhaps this will be part of an industry-wide movement, where pay-as-you-go customers will move to a carrier like Net10, which specialized in pay-as-you-go, while hybrid customers will pick up Virgin or Boost Mobile.
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Beyond their acquisition by Sprint Nextel, Virgin saw a consumer shift to more profitable hybrid plans. This allowed their net income to rise while their operating revenue fell. So while Virgin is losing customers like its to-be parent company, at least Virgin is seeing those remaining customers migrate to plans which benefit the company.
It makes sense that hybrid plans — those which mimic contract plans by offering a set number of minutes for a fixed monthly price — would bring in more revenue. When balances run low, they’ll conserve, delaying the purchase of another top-up card. But with hybrid plans, the customer is already locked into a set amount monthly. That gives Virgin a steady income.
Over the next quarter, Virgin will likely focus on getting more customers on hybrid plans, even if it means losing subscribers overall. Perhaps this will be part of an industry-wide movement, where pay-as-you-go customers will move to a carrier like Net10, which specialized in pay-as-you-go, while hybrid customers will pick up Virgin or Boost Mobile.
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