Sprint Nextel's (NYSE: S) Virgin Mobile brand is going after the low end of the market with a new "sub-brand" called PayLo that is offering two low-cost plans targeted at the budget-conscious. PayLo will be sold in drug chains and convenience stores as well as RadioShack and Best Buy.
One PayLo option offers 400 minutes for $20 per month with minutes as low as 5 cents per minute. The second plan costs $20 but provides 90 days of activation with minutes at a base rate of 20 cents each. PayLo handsets include the LG101 for $19.99 and the Samsung M340 for $39.99. PayLo customers can add minutes to their account with Top-Up cards. They can also add text messaging for 15 cents per message and picture messaging for 25 cents per message. Data access costs $1.50 per megabyte.
Last May Sprint unveiled a multi-brand prepaid wireless strategy with the goal of segmenting the market and establishing distinct brands. The plan included a full relaunch of the Virgin Mobile brand, with new phones and service plans, as well as the Common Cents Mobile brand aimed at the pay-per-minute prepaid market. Sprint, which has relied on prepaid for growth as it continues to struggle with postpaid subscriber defections, is also pushing its Boost Mobile brand as well as the Assurance Wireless brand, which is aimed at low-income customers.
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