Virgin Mobile USA Suffer Continued Losses

It seems that another wireless network is going through a tough time.

It has been reported that despite adding more than 210,000 customers in the final quarter of last year, Virgin Mobile USA Inc. will be taking on a loss of $3 million to $6 million. The company stock was down more than 13% to $6.99 according to the news. Well, if I am an investor, then I will have a pleasant day with those figures.

I don't find it surprising that a lot of consumers decided to choose Virgin mobile over other wireless carriers. After all, this wireless network has been a consumer champion according to some studies. In fact, this company added a total of about 512,000 customers into their network last year and currently have nearly five million customers.

I think that this is a good indication that excellent customer service or providing good consumer satisfaction is a important factor in gaining customers. Some wireless networks who were criticized for subpar customer relations have promised better customer service programs for this year.

Let's go back to the scoop on Virgin Mobile's losses. According to reports the losses were caused by an increasing competitive prepaid landscape combined with economic impacts on the customer base of Virgin Mobile.

The CEO, of Virgin Mobile Inc., Dan Schulman, reassured his company's investors with these words, "We believe that sustainable, disciplined customer acquisition will result in higher return on investment and growth over the long term."

He is hoping that the current decline in the wireless network's stocks is only a short term effect of the economic factors that are affecting the company. He also pointed out that during the final months of the year, Virgin Mobile purposefully avoided cutting prices on its handsets. The CEO further explained that poor customer economics is the common result of temporary, aggressive pricing.

I hope that this slide is indeed only a temporary problem for Virgin mobile. They are doing a good job at providing good and cheap service to their customers. If they can adjust accordingly to the factors that have cause the decline of their stock value, then perhaps they can make their investors happy.