Branson mobiles on line for a float

VIRGIN Mobile, the telecoms arm of Sir Richard Branson's empire, has burst through the three million customers mark after the second-best quarter in its three-year history.

It is also moving closer to buying out its joint-venture partner T-Mobile, the mobile arm of Deutsche Telekom, which would give Branson the option of floating Virgin Mobile on the stock market with a value of more than £1bn.

Virgin and T-Mobile fell out earlier this year over how they split revenues but after changes in T-Mobile's UK management the two sides pulled out of a threatened High Court battle.

Branson said: 'Since the new management came in at T-Mobile, there has been change of attitude and a willingness to get things sorted out.'

He had a 'very constructive meeting' last month with T-Mobile chairman Rene Obermann. Terms of a deal have not been finalised but Virgin is likely to give T-Mobile a higher proportion of revenues in return for its 50% shareholding.

Branson said a decision on flotation could be taken early next year. He said he would keep the UK and US businesses separate. The Stateside company has just chalked up one million customers and is a joint venture with Sprint.

In the summer months of July, August and September, the UK business gained a net 269,000 new customers. That made it the second best quarter for Virgin Mobile after last year's bumper Christmas.

Year-on-year growth of 16% took the total customer base to 3.13m, boosting its share of the market above 6% for the first time.

During the quarter, Virgin launched a £5 airtime voucher while other operators raised their minimum price of vouchers to encourage pay-as-you go customers to shift on to contracts.

It will have opened 92 'shops within shops' for mobiles in Virgin Megastores by the month's end.

Branson said: 'We're giving the consumers a choice and the old guard operators a run for their money.'

Turnover rose by 10% from £102m in the second quarter to £113m in the third. Earnings before interest, tax, depreciation and amortisation fell slightly from £25.6m in the second quarter to £24.8m in the third but that is well up on a year ago when earnings were just £4m. Operating profits for the nine months were £59m.

Average spend per customer remained static at £135 a year.

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