It seems that Virgin Mobile will not be considered among the top mobile phone service providers. The company's stocks plummeted after it reported a $14.7 million loss in the fourth quarter. This article says that the stocks dropped more than 53% from its closing price! Fortunately, things are not too grim for Virgin Mobile. The company reported that it earned net income of $4.2 million for the full year meaning that customers and investors shouldn't be too alarmed.One of the factors that kept the company in good ground is the relatively healthy number of subscribers. The carrier ended up with more than 5 million customers last year after it assimilated more half a million new customers. However, this is still significantly lower with compared with the number of new customers in 2006 which number more than seven hundred thousand.
Analyst predict that 2008 may be a bad year for Virgin mobile and the company may suffer a loss of up to six million bucks when the years ends. This prediction is based on the company's stock steadily decline during the past month.
Company CEO Dan Schulman is trying to assure investors that the company will be able to survive this crisis. He explained that Virgin mobile is in the process sitting out the aggressive handset pricing wars many MVNOs waged to build long-term growth. The CEO gave this statement,
“We maintained a disciplined customer acquisition strategy; while competitors were aggressively lowering prices in the fourth quarter to impact gross adds, we chose not to pursue what historically have proven to be low-value, low-tenure customers.”
It seems that Virgin mobile seems to be on the decline. Although it is taking hundreds of thousands of new customers every year, the company is still struggling. If this continues we may see the company merging wirth a bigger mobile phone provider in the next following years.
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