Virgin Mobile To Launch Free Wireless Services: Is It True?

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Jan 10, 2017 08:19 AM EST

One of the four major players of the pre-paid cellular arena in the US, Virgin Mobile is about to test an unusual strategy in the market. The Sprint CEO Marcelo Claure has announced that the company is testing a new business model for Virgin. Instead of offering subsidies on handsets, Virgin will offer free wireless service to customers.

Phandroid reported that Claure said "One model we're testing is... actually providing free airtime with no subsidy on the handset." He also said that 'Virgin' is going to be the company's disrupter brand on which different business models will be tested from time to time.

Experts are cautious, though. It is still not clear how much lack of subsidies will mean for the customer. Right now, Virgin smartphones are available in the market for as little as $100, where it is fully unlocked and do not have any carrier influence.  

Moreover, Virgin might also use on-device ads to make up for all the loss that it will incur by not charging for the wireless service. Some believe that the promise would have been more believable if Virgin Mobile had been charging for baseline service, and allowed customers to earn the free airtime in some way.

Sprint Corporation and its subsidiaries offer various wireless and wireline communications products and services. The wireless services it offers include:

  • data communication services such as Internet access, email, and messaging services;
  • location-based capabilities such as navigation tools, dispatch services, and fleet management;
  • mobile entertainment apps; and
  • photo and video offerings.

It also offers wireless voice services. Its brands include the Sprint, Virgin Mobile, Boost Mobile, and Assurance Wireless.

During CES 2017, the Sprint had offered free UberX rides up to $10 for attendees. The rides were available from the Las Vegas Strip or the McCarran International Airport to the Las Vegas Convention Center from January 5 to January 8, 2017.

Mobile business experts warn that it is not possible for any business to offer completely free services. Hence, they are warning the users to read the fine print, whenever Virgin Mobile launches the scheme on a national scale.

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