Tuesday, June 05, 2012

Sprint's Virgin Mobile brand to sell the iPhone

Just a few days ago, Leap Wireless' Cricket Communications became the first prepaid wireless carrier in the U.S. to announce upcoming support for the iPhone. Already, less than a week later, it's being joined by another prepaid carrier, with sources saying that Sprint's Virgin Mobile brand is about to break into the iPhone business.

Sprint itself has not confirmed the news, but the Wall Street Journal's source said the carrier will announce the offering this week.

Sprint made a major bet on the iPhone when it committed to buy $15.5 billion worth of Apple's smartphones over four years, and this move could help the carrier make good on that deal. While Sprint's postpaid customers are an area of negative growth, its prepaid brands continue to be the lone area of growth for the nation's No. 3 wireless carrier.

Sprint's prepaid brands also include Boost Mobile, but it is unclear if that brand will also carry the iPhone.

Leap's Cricket Communications will sell the iPhone 4 and iPhone 4S, both online and in Cricket-owned stores and dealers in nearly 60 markets across the U.S., starting on June 22. The 8GB iPhone 4 will sell for $399.99, while the 16GB iPhone 4S will be priced at $499.99.

Buyers will have to opt for a $55 plan for unlimited talk, text and data, where unlimited really means 2.3GB of data, with data use over that value being throttled.

The iPhone deal was a big investment for Leap Wireless. In order to carry the world's most popular single smartphone, Leap had to ink to a deal with Apple in which it agreed to buy $900 million worth of iPhones over three years.

The WSJ source had no Sprint pricing information available. We can assume the iPhone will be offered in both forms, iPhone 4 and 4S, with similar pricing to Cricket's for the devices, and probably not be far off. The bigger question is, in all likelihood, the service plan.

Virgin Mobile has prepaid plans that start at $35 per month and offer unlimited data (although speeds are throttled after the user uses 2.5GB in a month). It is not yet clear if an iPhone user will be required to select a special plan or will be allowed to opt-in to Virgin Mobile's current plans.

Still, Virgin's iPhone will be available more widely than Cricket's. Cricket Communications only serves smaller markets. While Cricket users will be able to use their iPhones anywhere, they must live within its network in order to buy the phone, and Cricket only covers about 60 million people, or 20 percent of the U.S. population.

Sprint's network, which is used by Virgin, claims to cover about 278 million people or nearly the entire country.

With these new prepaid carriers and several regional carriers gaining access to the iPhone, T-Mobile's customers might be asking, "What is going on?" The iPhone is now sold by far more than just the Big Three wireless carriers, but for some reason, T-Mobile cannot break through and join the party. The question is "Why?"

It's possible it has something to do with the network frequencies on T-Mobile's network. Unlocked iPhones can work on the T-Mobile network, but only in slow EDGE mode. There is a change coming, though. T-Mobile earlier said that, despite not currently having the iPhone, it would enable HSPA+ frequencies in many markets, such that the iPhone will operate in faux 4G mode.

That will happen before the end of the year, and perhaps soon enough for Apple to give T-Mobile access to the iPhone 5.

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