Virgin Mobile jumps into pricing war with new $50 unlimited plan

Virgin Mobile USA cut the price for its unlimited calling plan to $50 from $80, putting it into direct competition with second-tier operators including MetroPCS and Boost Mobile. The MVNO's $50 calling plan will be available April 15, and customers who currently are on the $80 plan will have to call Virgin Mobile to switch over.

Virgin Mobile's decision to slash the price of its unlimited calling plan is another indication that there is a war at the $50 price point going on among operators such as Sprint Nextel's Boost Mobile prepaid unit, MetroPCS and Leap Wireless. Indeed, Virgin Mobile spokeswoman Jayne Wallace said the move was "definitely a response to the marketplace."

The battle caught fire following Boost Mobile's launch of unlimited voice, text messages, mobile web access and Nextel walkie-talkie service in January for $50. Tier 1 operator T-Mobile USA launched a $50 per month unlimited voice plan for select customers in early March. And Leap and MetroPCS have long offered a variety of unlimited monthly plans ranging from $35 to $50 per month.

In other Virgin Mobile news, the MVNO unveiled a plan to help customers who have recently been laid off, called Pink Slip. If customers sign up for the new unlimited plan or other monthly plans without contracts, and are on the plan for two months and then become eligible for unemployment benefits, Virgin Mobile will waive up to three months of monthly charges.

Finally, Virgin Mobile announced a renewed deal with Sprint (Virgin Mobile's service runs on Sprint's CDMA network through an MVNO deal between the two companies). According to a Securities and Exchange Commission filing, Virgin Mobile "will pay fixed, lower rates for domestic network usage for each minute of use each month exceeding a base amount, effective April 1, 2009. Beginning January 1, 2010, VMU (Virgin Mobile) will pay a fixed rate for messages, regardless of volume, but will no longer be eligible to receive a discount for messaging rates in 2010 based on aggregate payments for all usage during 2009. The company will be eligible to receive a discount to existing rates for data services relative to aggregate payments for all usage during 2009."

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