MVNO Virgin Mobile USA has reported a sharp fall in Q2 profit as revenue declined and the company lost net subscribers. Its quarterly earnings were US$3.54 million, less than half that of the year-ago period (US$7.14 million). Revenue fell 3 percent to US$317.4 million. Meanwhile, the company lost 111,273 net customers during the quarter, more than double that in the year-ago quarter. Total subscribers now stand at 4.99 million customers. Despite the results, shares rose 9.5 percent in after-hours electronic trading yesterday as the figures were better than analysts had expected. Last week, Virgin Media, the UK-based ‘quad-play’ operator, wrote down the value of its Virgin Mobile UK MVNO business by £366.2 million.

Q2 saw Virgin Mobile USA announce its acquisition of youth-oriented rival Helio from SK Telecom and Earthlink for US$39 million in stock. Both Virgin Mobile and SK Telecom will invest US$25 million in the company and the deal is expected to close in the third-quarter. “The closing of the Helio acquisition and the expected repayment of US$50 million of our senior credit facility are expected to further improve our liquidity and cash flows,” CFO John Feehan said in a statement. Looking ahead, Virgin Mobile USA forecast third-quarter results of breakeven to a profit of US$0.03 per share (against analyst expectations of a profit of US$0.08 a share), with net customer adds to be in a range of a loss of 20,000 to a gain of 20,000.