Virgin Mobile USA, the leading US mobile virtual network operator, plans to raise $100m (£50m) in an initial public offering, according to a filing made with the US Securities and Exchange Commission Tuesday.
The New Jersey-based mobile carrier, a joint venture between Richard Branson’s Virgin Group and Sprint Nextel, the third largest US mobile carrier, did not disclose how many shares will be offered or provide a price range.
Like most of the mobile virtual network operators in the US, Virgin Mobile leases network capacity from Sprint Nextel. The company said it intends to use all the net proceeds from the offer and some borrowings under new credit facilities to repay existing debt and pay an undisclosed amount to Sprint Nextel.
Virgin Mobile, which was launched almost five years ago, has built a strong following among teenage users in particular by offering a reasonably priced pay-as-you-go service.
Last year Virgin Mobile increased its customer base by 19 per cent to 4.57m, representing about a 15 per cent share of the pay-as-you-go market. By the end of March that had risen to 4.88m.
This strong growth has helped Virgin Mobile steadily reduce its losses. Last year the company reported a net loss of $36.7m on revenues of $1.1bn, down from a net loss of $102.9m the previous year.