Reports from the US suggest that Virgin Mobile USA is preparing to dramatically scale down its operations in response to the weak performance of its stock price and increasing competitive pressures.

US investment website VentureBeat claims that the MVNO is preparing to slash 300 jobs – almost three quarters of its workforce – due to its weakening business outlook, though a company spokesperson declined to reveal exact numbers. 

Since its initial public offering in October 2007 Virgin Mobile USA has seen its stock price drop 85% as larger competitors such as AT&T and Verizon Wireless have successfully replicated its prepaid tariffs. The company told analysts last month that first quarter 2008 subscriber growth would fall by as much as 20,000 compared to net additions of 210,000 in the previous quarter. It added that company revenue would not increase in 2008 despite analyst estimates of 20% revenue growth.  

VentureBeat says that the scaling-back of Virgin Mobile’s US operations could spell the end of the MVNO business model in the US. It notes that other MVNOs in the country such as Helio are all facing similar difficulties.