Citigroup Annual EMT Conference DAN SCHULMAN, CEO

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1 Citigroup Annual EMT Conference DAN SCHULMAN, CEO January 8, 2009

2 PRESENTATION OF FINANCIAL INFORMATION AND FORWARD-LOOKING STATEMENTS The following presentation contains certain forward-looking statements and information relating to us that are based on the beliefs of our management as well as assumptions made by, and information currently available to, us. These statements include, but are not limited to, statements about our strategies, plans, objectives, expectations, intentions, expenditures, and assumptions and other statements contained in this document that are not historical facts. When used in this presentation, words such as "anticipate," "believe," "estimate," "expect," "intend," "plan" and "project" and similar expressions, as they relate to us are intended to identify forward-looking statements. These statements reflect our current views with respect to future events, are not guarantees of future performance, and involve risks and uncertainties that are difficult to predict. Further, certain forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. Many factors could cause our actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, those risks and uncertainties discussed in our filings with the Securities and Exchange Commission, copies of which are available on our investor relations website at and on the SEC website at We neither intend nor assume any obligation to update these forward-looking statements, which speak only as of their dates. The following presentation uses the financial performance metrics gross additions, end-of-period customers, Adjusted EBITDA and free cash flow which are not calculated in accordance with GAAP. All free cash metrics utilize free cash flow, as historical comparisons for unlevered free cash flow are not reconciled in public filings. We believe that these non-gaap financial metrics are helpful in understanding our operating performance from period to period and, although not every wireless company defines these metrics in the same way, we believe that these metrics as used by Virgin Mobile USA facilitate comparisons with other wireless communication providers. These metrics should not be considered a substitute for any performance metrics determined in accordance with GAAP. For definitions and a reconciliation of these metrics to the most directly comparable GAAP financial measure, please refer to the section entitled "Definition of Terms and Reconciliation of Non-GAAP Financial Measures" in our Third Quarter 2008 press release, which can be accessed on the homepage of our Investor Relations website at investorrelations.virginmobileusa.com. 2

THE VIRGIN MOBILE USA STORY Customers (millions) 5 4 3 2 1 Jul 02 1 million customers (Fastest US wireless operator to hit this mark) Virgin Mobile USA launches A Top Ten US wireless provider Nov 03

3 THE VIRGIN MOBILE USA STORY Customers (millions) Jul 02 1 million customers (Fastest US wireless operator to hit this mark) Virgin Mobile USA launches A Top Ten US wireless provider Nov 03 Mar 04 2 nd nd year running, J.D. Power & Associates highest prepaid customer satisfaction Exceeds $1 billion in annual revenue J.D. Power & Associates highest prepaid customer satisfaction *Adjusted EBITDA Guidance for 2008 excludes one-time transition costs associated with Helio acquisition and IT outsourcing Jan 06 FY 2006 Adjusted EBITDA of $47.9 million Aug 06 Dec million customers FY 2007 Adjusted EBITDA $99.1 million Aug 07 NYSE Listed VM Sep 07 Oct 07 Acquisition of Helio Dec 07 FY 2008 Adjusted EBITDA guidance $105 - $130 million* Aug million customers Dec 08 3

4 VIRGIN MOBILE USA HAS PRODUCED GROWTH AND PROFITABILITY SUBSCRIBERS (in thousands) 3,845 4,574 5,085 5,380 NET SERVICE REVENUES (in millions) $884 $1,020 $1,227 $1,210 - $1,220 2,851 $ ADJUSTED EBITDA (in millions) $ $105 - $130* FREE CASH FLOW (in millions) Guidance $25 - $35** $48 $11 ($48) ($35) ($67) ($134) ($73) ($73) ($134) Guidance *Adjusted EBITDA Guidance for 2008 excludes one-time transition costs associated with Helio acquisition and IT outsourcing Guidance **Based on Unlevered Free Cash Flow guidance of $55-$65 million Cash Interest 4

MVNO BUSINESS MODEL PRODUCES STRONG AND RESILIENT ROI

with limited capex Access to current / future

approach Own the customer experience Real-time

5 MVNO BUSINESS MODEL PRODUCES STRONG AND RESILIENT ROI NETWORK Sprint contract to 2027 Near-owner economics with limited capex Access to current / future technologies Nationwide INFRASTRUCTURE MVNO-heavy approach Own the customer experience Real-time billing / pricing / promotions for prepaid, hybrid and postpaid BRAND World-class, respected brand Low customer acquisition costs due to brand recognition Brand license to

6 CASH FLOW IS THE KEY STRENGTH OF THE MVNO BUSINESS MODEL ILLUSTRATIVE COMPARABLE ADJUSTED EBITDA HIGH FREE CASH FLOW CONVERSION (1) VM Adjusted EBITDA ex Network Cost Implied Depreciation FY 2008 Virgin Mobile vs. Peers (2) FCF conversion $128 $227 $141 $246 to $271 79% to 83% $99 $ Adjusted EBITDA Network Cost Implied Depreciation (3) FY 2007 $122 Illustrative Comparable Adjusted EBITDA $105 to $130 * Adjusted EBITDA* 2008 Guidance Network Cost Illustrative Implied Comparable Depreciation (3) Adjusted 2008 Guidance EBITDA * 2008 Guidance Virgin Mobile 61% (2) Peer Average 1. Defined as (Adjusted EBITDA Capex)/Adjusted EBITDA 2. Includes Verizon Wireless, Sprint Nextel and T-Mobile USA. 3. Assumes 12.5 billion MOUs for FY2007 and 14 billion MOUs for 2008 Guidance with illustrative depreciation charge of $0.01 per MOU *Adjusted EBITDA Guidance for 2008 excludes one-time transition costs associated with Helio acquisition and IT outsourcing 6

7 VALUE PROPOSITION EXPANDING BEYOND THE YOUTH MARKET 65% of customers have household income under 58% are employed 78% pay for some or all of their service 49% of new customers are over the age of 34 $50k RECOGNIZED BRAND WITH BROAD NATIONAL APPEAL Source: Virgin Mobile Customer Survey Q3 2008

8 WELL-POSITIONED IN CHALLENGING ECONOMIC ENVIRONMENT Most competitive service offerings for more than 80% of consumers Expanding service offer, handsets, and distribution Expansion into postpaid through acquisition of Helio Strong financial position 80% of consumers use fewer than 1200 minutes At 1300 minutes per month or less, our plans have the lowest cost per minute Best service value in the industry, with plan flexibility to fit your budget High-value handset portfolio with low cost of entry Distribution expansion in high value retailers Complete service plan portfolio Expansion of sophisticated data services, social networking and LBS capability Strong & improving yearover year growth Cost savings initiatives in 2008 will reap strong benefits in 2009 Excellent liquidity and ample covenant headroom Revolver held by equity partners 8

NEW VOICE AND DATA PLANS PROVIDE COMPELLING NEW CONSUMER OFFER 50% 45% 40% 35% 30% 25% 20% New plans launched throughout Q2 are resulting in an increase in hybrid as a % of gross adds.

9 NEW VOICE AND DATA PLANS PROVIDE COMPELLING NEW CONSUMER OFFER 50% 45% 40% 35% 30% 25% 20% New plans launched throughout Q2 are resulting in an increase in hybrid as a % of gross adds. 32% 22% 47% New plans are also resulting in newly stimulated growth in the base. 26% Q307 Q407 FY07 1Q08 2Q08 3Q08 Roll-out began in Q Completed Q Benefits to the base reflected in Q3 improvements in hybrid additions and ARPU continue in Q Hybrid % of Base Hybrid % of Gross Adds 9

10 ACQUISITION OF HELIO BRINGS IMMEDIATE STRATEGIC AND FINANCIAL BENEFITS Strategic Benefits 170,000 Helio customers at close with approximately $80 ARPU Entry into postpaid segment through acquisition of highly sophisticated customer platform supporting unique user applications Immediate reduction to Helio s cost structure by 70%, with customers now LTV positive 10

11 ACQUISITION OF HELIO BRINGS IMMEDIATE STRATEGIC AND FINANCIAL BENEFITS Financial Benefits Strategic investment totaling $50 million at $8.50 per share on August 22, 2008 Incremental $60 million added to revolving credit facility and $40 million reduction in overall net debt at close of acquisition Improved network rates for 2009 including an 8% reduction in the effective rate per minute and a $2.50 credit per gross add 11

12 COST SAVING INITIATIVES IN 2008 POSITION US WELL FOR 2009 IT outsourcing to IBM improves product development and time to market, while creating an expected $50 million in cost savings over 5 years Headcount reduction of 10% in Q Further renegotiation of Sprint network contract will result in a further reduction in network rates in 2009 COST REDUCTIONS WILL ALLOW VIRGIN MOBILE TO REINVEST IN GROWTH IN

13 STRONG Q4 CUSTOMER PERFORMANCE The fourth quarter of 2008 showed strong customer additions and retention as consumers are attracted to value and flexibility Q4 Gross adds of 960,000 Net additions of nearly 216,000 Churn of 4.8% INVESTMENTS IN 2008 SET THE STAGE FOR GROWTH IN

14 GROWTH MARGINS STEADILY IMPROVED THROUGH 2008 Gross Adds Operational initiatives implemented during the year showed clear financial benefits in Q % 100% 50% 0% -50% Adjusted EBITDA excluding onetime restructuring costs 4% 108% 125% at midpoint -31% Q Q Q3 2008* Q E * 10% 5% 0% -5% -10% -15% 10% 5% 0% -5% -10% 8% 0% -7% -10% Q Q Q Q E Net Service Revenue 6% to 9% 1% -6% -6% Q Q Q Q E *Adjusted EBITDA Guidance for 2008 excludes one-time transition costs associated with Helio acquisition and IT outsourcing 14

15 QUESTIONS

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