Virgin Mobile has suffered a drop in its new subscriptions rate, adding only 77,000 customers in the three months ending in June compared to 150,000 during the same period a year ago.
Some analysts had expected between 100,000 and 150,000 new subscribers, but Virgin Mobile described the estimates as too optimistic, claiming that customer churn and upgrading had put paid to growth across the sector.
The operator reported a churn rate of 24 per cent during the period, up from 22.6 per cent a year ago. Virgin Mobile has 4.1 million active customers compared with 3.39 million a year ago.
"I think its biggest problem is 3, which offers very good deals on phones and tariffs, and buckets of call time," said Dean Bubley, founder of analyst firm Disruptive Technologies.
But Virgin denied any suggestion of a slow-down, maintaining that its first-quarter revenue was up 6.8 per cent and that it expected "mid-teen" growth for the full year due to its ability to increase average revenue per user. The latest revenue per user figure is £123 compared with £127 in the previous quarter.
Analyst firm Gartner has predicted that mobile phone sales will top one billion units worldwide by 2009, with 790 million sales this year mainly driven by uptake in the developing world.
Sales in Asia-Pacific will grow fastest, according to Gartner. The region currently accounts for a quarter of all mobile phone sales but this will rise to a third by 2009.
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