New York - Virgin Mobile USA launched its prepaid, youth-oriented wireless-phone service on June 23 in Sacramento and Columbus, Ohio, and will go nationwide by the end of July, when it said its customized Kyocera-made phones will be available in most major metropolitan areas.
By the end of August, the company's 'grab-and-go' phones will be available in 3,000 retail outlets, including Best Buy, Circuit City, a campus bookstore chain, Media Play, Sam Goody, Target, and Virgin Megastores. Prepaid cards will be available in another 8,000 outlets, including Circle K and 7-Eleven convenience stores and Winn-Dixie supermarkets. Virgin will also sell direct through a toll-free number and its web site, www.virginmobileusa.com.
Virgin is using Sprint PCS's network to deliver its service, described by CEO Dan Schulman as targeted exclusively to the under-30 crowd to bolster the wireless industry's low penetration rates among U.S. youth. In the U.S., the penetration rate for 13-24-year-olds is 25 percent, but in Europe, it ranges from 60-85 percent, depending on the country, he said.
To reach this crowd, Virgin is promoting simplicity of purchase, a single all-inclusive rate plan, user control over costs, value, and entertainment- and messaging-oriented oriented VirginXtra services available via voice command. The latter includes music-clip streaming, voting via handset on favorite songs, and listening to jokes and gossip.
Although simplicity was the promise of the first PCS carriers that went on line in the 1990s, Virgin hopes to finally deliver on that theme with a single price plan whose per-minute charges include long distance, no peak or off-peak distinctions, and roaming on Sprint-owned and Sprint-affiliated networks. Combined, those networks cover markets with a population of 250 million.
Airtime costs 25 cents/minute for the first 10 minutes of a day (which begins at 5 a.m.) and 10 cents for every minutes after that. Those prices also include taxes and surcharges. Also for simplicity, there's no activation fee, contracts, or early termination charges.
'The overwhelming majority of youth' use less than 300 minutes per month, so they're average per-minute charges on prepaid and postpaid plans 'is astonishingly high' compared to the Virgin plan, Schulman noted.
Two 2G handsets are available, a third will follow in the fall, and then Virgin will offer 3G handsets, Schulman said.
SMS messages cost 10 cents to send and no charge to receive. Downloadable ring tones are $1.
To keep user costs down, roaming onto non-Sprint networks won't be allowed.