Sprint's Virgin Mobile Adds PayLo Sub-Brand

By Joseph Palenchar -- TWICE, 7/15/2010

Warren, N.J. - Sprint's prepaid division continued to segment the growing prepaid market.

The company is doin so with a new sub-brand called PayLo by Virgin Mobile, a pay-as-you-go service targeted to low-usage consumers who mostly want to talk and want to keep their costs down to about $20/month.

A 400-minute PayLo voice plan costs $20/month, yielding per-minute charges of 5 cents. Less-frequent talkers get the option of paying $20 to keep an account active for 90 days and make calls at a rate of 20 cents/minute, the company said.

The PayLo service and handsets are available at Virgin Mobile's website and will roll out this month in drug and convenience stores as well as RadioShack and Best Buy. Other Virgin Mobile-branded services, targeted to young social networkers, are also sold through major retailers and drug and convenience stores.

Sprint unveiled a multibrand prepaid strategy earlier this year, repositioning its Virgin Mobile brand mainly toward young social networkers and its Boost Mobile brand to talk and text users. Sprint also launched a pay-as-you-go prepaid service -- Common Cents Mobile -- for cost-conscious consumers who primarily use cellular voice and text. That service became available exclusively at more than 700 Walmart in May. Sprint's other existing prepaid brand, Assurance Wireless, remained targeted to 37 million low-income households who qualify for free government-paid service.

 All brands are targeted at specific segments of an increasingly diverse prepaid market, the company said.

Under its previously announced multibrand strategy, Sprint is using the Virgin Mobile brand mainly to target youthful consumers "who use text and data services to power constant connection with their social networks," the company said. For these consumers, Virgin's Beyond Talk plans offer unlimited messaging, email, data and web access, plus a select amount of voice minutes, starting at $25 a month.

"In terms of marketing," a spokesperson said, "the focus [at Virgin Mobile] will be on Beyond Talk plans." On July 12, in fact, the company launched a "Crazy Life" ad campaign to promote the Beyond Talk Plans, she said.

 The target demographic for the pPayLo by Virgin Mobile sub-brand is different than that of the Beyond Talk plans, she continued. "Beyond Talk plans are geared more for people looking to constantly be connected on the go through social networking sites, email, IM and the web. Pay-as-you-go customers are looking to use their cellphone primarily to talk. Virgin Mobile is introducing PayLo to accommodate the needs of these budget-conscious, cash-constrained and glove-box customers who are asking for a no-frills approach to a pay-as-you-go offer with simple, easy-to-understand plans and handsets."

 With the new PayLo service, available handsets offer basic voice, voice mail, text messaging and caller ID functions. The handsets include the LG101 at $19.99 and the Samsung M340 at $39.99. Customers buy $20 and $10 Top-Up cards to activate voice minutes and pay for text messaging, Web access, ringtones, downloads and the like. Consumers can also add to their monthly balance via credit/debit card or PayPal account at Virgin's website. Text messages cost 15 cents, and picture messages cost 25 cents. Customers who access the web pay a basic rate of $1.50 per megabyte.