Customer numbers at Virgin Mobile are up 37% on a year ago, the UK's fifth- largest mobile phone operator has said.
Virgin Mobile was launched in 1999
Virgin said its total subscriber base reached 5.03 million by 31 December, and it added a net 417,000 users in the October-to-December period alone.
However, average customer revenues slipped to £132 ($248) in the quarter, down from £137 in the previous quarter.
This was enough to trigger a 19 pence fall in Virgin Mobile's share price to 246 pence on Tuesday.
The company blamed the fall in annual revenues per user (ARPU) on a regulatory cut in tariffs last September.
The group's churn level - when customers switch operators - edged higher to 16.2%.
The no-frills mobile company was launched in 1999.
It floated on the stock market in July last year and is currently valued at about £670m.
Described as a "virtual operator," Virgin differs from rivals, Vodafone, mm02 and Orange in that it does not own its own network - it uses T-Mobile's network to carry its calls.
The majority of its business comes from customers who buy pre-pay vouchers to top up their mobile phones.
On average, the firm spent £28 over the quarter on signing up each new customer, a "modest" increase, according to the company, given highly competitive conditions.
"In this last Christmas quarter, we enjoyed record connections - our best-ever quarter - resulting in Virgin Mobile passing its five million milestone," said Tom Alexander, chief executive of Virgin Mobile.
"Strong January trading has seen us make a good start to 2005."
Virgin Mobile employs 1,400 staff at three locations in Trowbridge, London and Daventry.