Virgin Mobile's "Sugar Mama" Promo Not So Sweet

Virgin Mobile USA reported mixed results Monday from its “Sugar Mama” program, which lets customers earn free mobile phone minutes by watching and responding to ads and surveys via computer and text message from advertisers like Pepsi, Microsoft, Nintendo and Sony. Virgin said its wireless subscribers “earned” 9 million minutes in the one year the promotion has existed, and that the click-through rate to advertisers’ Web sites averaged 5.5%, peaking at 21.1%.

But fewer than 10% of Virgin Mobile’s 4.9 million subscribers have signed up for the program, and the ones who did only stuck around long enough to earn an average 25 minutes of airtime. “Sugar Mama” seems a bit confused — it’s not clear why a wireless carrier should be in the business of selling Internet ads — but it’s a sign of things to come as carriers desperately look to make up for declining voice-service revenues through advertising programs.

The Warren, N.J.-based “virtual” carrier, which re-sells airtime on Sprint Nextel’s network, is in the process of going public. According to SEC filings, it earned $15.4 million on $322 million of revenue in the first quarter of 2007.

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