Virgin Media 2008 Annual Report Download - page 64

Revenue
Our Mobile segment revenue was comprised of (in millions):
Year ended December 31,
Increase/
2008 2007 (Decrease)
Revenue:
Service .................................. £548.3 £567.6 (3.4)%
Equipment(1) ............................. 21.7 30.0 (27.7)%
Total revenue ............................... £570.0 £597.6 (4.6)%
(1) Equipment revenue is stated net of discounts earned through service usage.
For the year ended December 31, 2008, Mobile segment revenue decreased to £570.0 million from
£597.6 million for the same period in 2007. The decrease in service revenue was primarily attributable
to lower prepay revenue as a result of a decline in the number of prepay subscribers of 652,200 during
2008, partially offset by increased contract revenue driven mainly by an increase in the number of
contract subscribers of 273,100 in the year. The decrease in equipment revenue was mainly due to a
reduction in the average price of handsets during the year, partially offset by increased volume of
handset sales.
Mobile ARPU increased slightly to £10.75 for the three months ended December 31, 2008 from
£10.69 for the three months ended December 31, 2007. The increase was primarily due to the increased
proportion of our higher value contract customers, relative to the total number of mobile customers,
which rose to 15.8% at December 31, 2008 from 8.4% at December 31, 2007, partially offset by lower
prepay usage in the three months ended December 31, 2008.
Mobile segment OCF
For the year ended December 31, 2008, Mobile segment OCF was £105.7 million compared with
£108.7 million for the same period in 2007, primarily due to lower revenues as described above and
increased interconnect costs, partially offset by lower subscriber acquisition costs and employee related
costs.
During the year ended December 31, 2008, we agreed new terms with our mobile network
provider which reduced the wholesale rates we pay for voice and data traffic, retroactive to January 1,
2008 for voice and to April 1, 2008 for data. We also agreed new data pricing rates which allowed us to
launch a complementary mobile broadband proposition and to price more competitively in the growing
mobile data usage market which should be more attractive for higher value customers. We also
committed to purchasing our current core voice, text and handset data and mobile broadband data card
services exclusively from our mobile network provider for a three year period commencing April 1,
2008.
Summary Mobile Statistics
Selected statistics for Virgin Mobile are set forth in the table below. Between December 31, 2008
and December 31, 2007, the number of mobile customers decreased by a net 379,100 customers.
Contract customer net gains of 273,100 were offset by net losses of 652,200 prepay customers. The
growth in contract customers reflects the drive for ‘‘quad-play’’ packages through cross-selling with our
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