Virgin Mobile USA announced Thursday that it will start to sell a prepaid iPhone on June 29th charging $549 for a basic model.
According to the Christian Monitor, the phone service will start at $30.00 per month, which ultimately values the total purchase for two years of service at $1,269 without taxes. That price would be nearly $800 cheaper than with a phone subscriber such as Sprint which charges $100 for the phone and $80 per month for service.
Virgin Mobile USA, one of Sprint’s brands for pre-paid, no-contract phone service, will be offering the iPhone 4 with eight gigabytes of memory and the 4S model with 16 gigabytes of memory. However, the 4S model will start at $649.
Virgin Mobile’s cheapest plan costs $35, but offers a $5 discount to buyers who set up automatic monthly payments with a credit card, debit card, or PayPal account. The plan offers 300 minutes of calling per month, unlimited texting, and unlimited data usage. However, the phone slows down after the customer uses 2.5 gigabytes. This problem is not encountered under Sprint’s iPhone service. There will also be a $50 unlimited voice plan under Virgin Mobile.
According to the Wall Street Journal, Sprint’s main competitors Verizon Wireless and AT&T sell the iPhone for hundreds of dollars less than the retail price, but make up the money by locking subscribers into two year data plans.
The move presents Sprint’s latest attempt to sell the phone after committing to a $15.5 billion four year commitment with Apple and is the second company to attempt the prepaid phone service on the iPhone. Last week, Leap Wireless International Inc., the parent of Cricket Prepaid service, stated that it would start selling the iPhone on June 22. The phone would sell for as low as $400 and the monthly service rates would be $55.
Sprint, based in Overland Park, Kan., stated that it has over 15.3 million subscribers with no-contract plans under the Virgin, Boost, and Assurance Wireless brands. It has 32.8 million subscribers under Sprint and Nextel contract-based plans.