Virgin, Sprint PCS Team To Distribute Mobile Service

San Francisco— Virgin Mobile USA, the 50-50 joint venture between Sprint PCS and the Virgin Group, will likely distribute its phones and prepaid service through 20 Virgin Megastores in the United States, as well as other types of outlets.

The plan calls for supermarkets, toy stores and any other type of retail outlet that attracts 15- to 30-year-olds to sell its phone packages, if the company replicates its U.K. and Australia strategies.

The joint venture, a mobile virtual network operator (MVNO), plans to launch service in select markets during the first half of 2002 and complete a nationwide rollout by the end of the first half. The company will market airtime under its own name, offer its own value-added information and buying services, and otherwise own the customer, said Tom Mateer, Sprint PCS's VP of affiliates and private-label service. Virgin phones, however, will operate on Sprint's second and third generation networks.

Virgin Mobile hasn't announced distribution channels other than its 20 U.S.-based Virgin Megastores, which sell books, CDs, movie software and PC games, Mateer said. But the company will solicit "unique forms of distribution that tie in with its target audience," he noted.

The company said it's targeting a fast-growing customer segment with what it called its youth-oriented brand. It cited Strategis Group statistics forecasting an 184 percent increase in the 15- to 19-year-old customer base by 2007 and a 93 percent gain in the 20- to 29-year-old subscriber base by that time.

Initially, Virgin will offer prepaid service as it does in the U.K., Mateer said, but prepaid service won't be its exclusive product.