Sprint (NYSE: S) is relaunching its prepaid business today, following the acquisition of Virgin Mobile USA, and now is offering what must one of the most generous and lowest-priced data and voice plans in the industry.
The new offers are called “Beyond Talk,” which stresses texting and data over calling — an attractive combination for the youth segment. At the low end, Virgin Mobile (NYSE: VM) will charge $25 for unlimited messaging, email, data and Web with 300 minutes a month. For $40, you get 1,200 minutes, and for $60, you get unlimited calling. Or, add $10 for any BlackBerry plan. The plans, which will be available May 12, also come with no incremental fees or taxes.
As data becomes a major factor for why a teenager — or even an adult — buys a phone, the rate plans will become extraordinarily important. In fact, there was an example of how not to do it earlier this week when Verizon Wireless the youth-focused, and feature-light Microsoft (NSDQ: MSFT) Kin would start at $70, which is in line with other smartphones, but out of touch with the demographic they are going after.
This week, Sprint also rolled out new pricing plans for its Boost prepaid brand. Those phones will get unlimited voice and data, including email, text and Web, and other perks like free access to 411 for $50 a month.
The one draw-back to the deal is the selection of handsets. Because its a prepaid plan, the user has to pay close to full price for the phone, and therefore limits the range of devices to the lower-end. For now, the list includes the BlackBerry Curve for $300, the LG (SEO: 066570) Rumor Touch for $150, the LG Rumor2 for $90, and the Kyocera Loft for $70.
Sprint, which has been losing subscribers every quarter for awhile, sees prepaid as an attractive market segment to complete its turnaround. Dan Schulman, Sprint’s prepaid president and former CEO of Virgin Mobile, said: “In the first quarter of 2010, more than half of the mobile gross additions in the U.S. selected prepaid, and we predict that approximately 70 percent of the net adds in 2010 will choose plans without a contract.