Branson to continue to back Virgin Mobile

LAS VEGAS (Reuters) - Virgin Group head Richard Branson said on Tuesday he will continue to back Virgin Mobile USA Inc even as it endures tough times amid a U.S. recession that could last 12 months.

Virgin Mobile USA, which went public in October, warned last month its revenue would not grow this year and issued disappointing customer growth targets, under pressure from new competitive thrusts from bigger rivals such as Verizon Wireless and AT&T Inc.

Branson said Virgin Group, now a 35 percent owner of the U.S. mobile service, sees the phone company's difficulties as a near-term issue.

"There are cycles," he told Reuters in an interview ahead of his keynote speech at the CTIA annual wireless show. "I don't think the consumer downturn in America will be more than 12 months. It's likely to be 12 months."

Virgin Mobile USA offers prepaid mobile services to young people who pay for calls in advance rather than via monthly bills. Sprint Nextel Corp, the No. 3 U.S. mobile service, has a roughly 11 percent stake in Virgin Mobile USA and rents it space on its network.

Virgin Mobile USA, which was priced at $15 in its initial public offering, has seen its shares fall to trade at $2.05 on Tuesday afternoon on the New York Stock Exchange.