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Virgin Mobile Goes National, Teams With MTV Networks

7/25/2002 11:08:00 AM Eastern

New York - Virgin Mobile USA celebrated its national launch with a Times Square stunt by Virgin Group chairman Richard Branson and an announcement that the youth-oriented carrier struck an exclusive multiyear content and marketing agreement with MTV Networks.

The deal includes the delivery of music, games and other content branded with the MTV, VH1, and Nickelodeon names to the phones of Virgin subscribers. It also includes plans for MTV-branded accessories, an MTV-branded phone, and promotional airtime on MTV's channels and web site. In the future, subscribers will use the phones to interact with MTV and VH1 programs, including voting on songs they want to hear on MTV.

For the promotional stunt, Branson joined the Broadway cast of The Full Monty in a musical strip tease as he was lowered by crane from a landing above the Virgin Megastore in Times Square. Confetti showered the area as Branson and cast danced while wearing flesh-colored shorts and above-average-size cellular phones.

The stunt's theme, "We have nothing to hide," was selected to underscore the simplicity of the carrier's single prepaid airtime plan. The plan boats no hidden charges, and per-minute charges include long distance, taxes, roaming anywhere on the Sprint network, no peak or off-peak distinctions, call waiting, caller ID, voice mail, and incoming text messages.

The charges are 25 cents/minute for the first 10 minutes used each day, beginning 5 a.m., and 10 cents thereafter.

Although Virgin already offers youth-oriented content, the MTV deal will supplement that with additional content carrying MTV's brands, said Virgin Mobile USA CEO Dan Schulman during a press conference after . Entertainment services, along with the industry's "most affordable prepaid service" and absence of hidden charges, will tap a youth market whose wireless penetration rates are low, he contended. The price plan was built around the average youth's use of 200-250 minutes per month, he said.

The MTV partnership marries two youthful, irreverent brands, Schulman continued, and will contribute to Virgin's effort at turning a cellphone "into an entertainment device" that "can have a meaningful impact on the purchasing decisions" of consumers under 30 years old.

The Virgin Group's mission, a fully clothed Branson said during the press conference, is to "go where something is not being done well" or where consumers "are being taken for a ride."

Virgin's service is affordable, Schulman noted, because Virgin didn't spend massive amounts of money to build its own network, choosing instead to resell Sprint PCS airtime.

Schulman declined to elaborate on his promotion and advertising plans, but he said, "Don't expect a mainstream advertising approach." The promotion strategy will include advertising on MTV channels, promotion on college campuses, and "guerilla marketing."