2/3/2005 12:00:00 AM
New dealers add 40,000
Virgin Mobile put teething problems in the independent channel behind it as it added 40,000 customers through dealers in its third quarter, one in ten of all new connections.
Steven Day (pictured), director of corporate affairs, said: ‘The dealer community did 10% of our sales; that’s something we wouldn’t have had if we hadn’t moved into that market. That is a significant success as far as we are concerned.’
Virgin Mobile moved into the distributor channel last summer with Data Select, 20:20 Logistics and Unique Distribution.
The trials encountered difficulties at first, but 500 dealers were eventually accredited to sell the MVNO’s prepay products.
The dealer channel will continue to feature in Virgin’s growth plans this year, as it targets the contract market. It will also use its in-store concessions as a base to boost sales. Another 31 have been added since float, making a total of 94 in both Virgin Megastores and WHSmiths.
Virgin’s move into the post-pay arena will be based on the concept of bolt-ons rather than a strict contract tariff.
‘You will see us innovating over the next six months in different segments of the contract market. We were asked by analysts if we would ever do a conventional contract, and our answer is: is Virgin Mobile conventional?’ said Day.
Over the last quarter Virgin Mobile powered its way to a record 417,000 new connections, placing it second to Vodafone. Both have added around 1.1 million customers over the financial year to date.
However, the City was concerned by a £5 slip in ARPU to £132 and an increase in churn, which was up from 14% to 16% of Virgin’s base.
‘16% is a high number, but it is significantly less than the industry average,’ said Day.
However, Virgin Mobile’s shares slid from 265p to 246p after it released its results. They have been climbing steadily in recent months and some will see this as profit taking.