SAN FRANCISCO (Bloomberg) - Virgin Mobile USA Inc., Richard Branson's pay-as-you-go mobile-phone service, lost almost half its value in New York trading after cutting its 2008 earnings forecast by as much as 40 percent.

Virgin Mobile dropped $1.90, or 45 percent, to $2.30 at 1.01pm in New York Stock Exchange composite trading, the most since the October initial public offering.

Customer growth is slowing as Virgin Mobile faces mounting competition from pay-as-you-go and contract plans offered by AT&T Inc. and Verizon Wireless, the two largest mobile carriers in the US Virgin Mobile predicted subscriber gains of as little as 5,000 in the first quarter, missing a 130,000 estimate by Michael Nelson, an analyst with Stanford Group Co. in New York.

"It doesn't look pretty at this point," Mr. Nelson said yesterday in a telephone interview. He recommends selling the shares and doesn't own them personally. "This is significantly worse than what we were looking for."

Earnings before interest, taxes, depreciation and amortisation will be as little as $105 million this year, Warren, New Jersey-based Virgin Mobile said on Wednesday. That's down from a November prediction of as much as $175 million. Analysts in a Bloomberg survey estimated $142.5 million on average.