Ouch. It looks like Virgin Mediaâ€™s mobile arm has let the side down if the latest set of quarterly results is anything to go by: the company has announced a massive goodwill writedown on Virgin Mobile in its second quarter financials. In short, Virgin Mobile is now worth Â£366 million less than originally thought in goodwill terms.
Such writedowns are a bit of a nebulous beast â€“ who can really guess how much peopleâ€™s warm and fuzzy feelings are worth towards a brand? â€“ but wiping Â£366 million off Virgin Mobileâ€™s value, even if it is purely on paper, has got to smart a bit.
That said, it doesnâ€™t look like this is a major blow for Virgin Mobile. The decision to go ahead with the writedown comes as a result of declining values for mobile phone companies across the board, according to Virgin Media. Virgin Mobileâ€™s got a few other reasons to be cheerful too: the company is planning to get into the tasty 3G data market, itâ€™s doing better selling mobile contracts to cable customers and itâ€™s squeezing more cash from its pre-pay customers as well as adding more post-pay users. It might be a knock, but Virgin shouldn’t have any difficulty in putting it behind them.