Virgin Mobile USA L.L.C. revamped its pricing and messaging plans and added options that look much more like postpaid offerings than its traditional prepaid route.
The mobile virtual network operator has replaced its old Month2Month plans with five monthly, no-contract plans that range from $15 per month for 100 anytime minutes to $60 monthly for 600 anytime minutes. The two-tier Minute2Minute plan was replaced by a single pay-as-you-go plan with a rate of 18 cents per minute and no daily access charge. Virgin Mobile USA’s Day2Day plan was essentially folded into a third option, in which customers pay $7 up front and then get a talk rate of 10 cents per minute.
Virgin Mobile USA also has given customers the option to choose from several messaging bundles-a first for the prepaid market.
William Ho, industry analyst at Current Analysis, called the overhaul “a welcome change,” but also noted that customer perception of the new plans might get in the way of their success.
While Virgin Mobile USA actually discounted its per-minute pricing to 18 cents per minute, from a former charge as high as 25 cents per minute, Ho noted that customers might still perceive the cost to be higher than what other carriers are charging.
While Cingular Wireless L.L.C.’s GoPhone users still pay 25 cents per minute if they choose a pure pay-as-you-go option, Amp’d Mobile Inc. recently jumped into the prepaid space with a 10 cents per-minute offering. Both Cingular and Verizon Wireless offer 10-cent per-minute pricing-although users have to pay an extra $1 per day to get the 10-cent rate. Meanwhile, Virgin Mobile USA prepaid users can get 10-cent per-minute calls all month if they’re willing to pay $7 up front.
The two most expensive month-to-month plans, at the $45 and $60 price points, include unlimited night and weekend calling.
Text messaging bundles start at $2 per month for 50 messages and go up to $10 per month for 1,000 messages; users are charged for both sending and receiving messages, and overage messages cost 5 cents per message-as do sending and receiving text messages a la carte. That 5 cent price tag is half of the old 10 cent price, but is balanced by the fact that Virgin Mobile USA used to charge only for sending messages, not for receiving them. Boost Mobile L.L.C., by comparison, uses the same 10-cents-to-send, free-to-receive pricing model that Virgin Mobile USA decided to abandon.
Atlantic-ACM analyst Fedor Smith observed that given Virgin Mobile USA’s text-loving, young demographic, the text bundles for prepaid make good sense for the MVNO and that he expects the rest of the industry-particularly Virgin Mobile USA’s competitor Boost Mobile-to respond by following suit in some way. Text message bundles, Smith said, could be a selling point both for young users and for parents seeking to limit how much texting their children do.
