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Virgin Mobile will be the next prepaid service to get the iPhone, Sprint Nextel confirmed today.
Virgin Mobile follows Leap Wireless, which last week said it was getting the iPhone for its Cricket prepaid service. Like Cricket, the Virgin Mobile version of the iPhone won’t be cheap; the 16-gigabyte iPhone 4S will cost $649, while the 8GB iPhone 4 will cost $549.
The appeal of a prepaid iPhone is the lack of a contract and lower monthly plan. Virgin Mobile will offer a $30 plan with 300 voice minutes, a $40 plan with 1,200 minutes, and a $50 plan with unlimited minutes. All of the plans come with unlimited text messages, and 2.5GB of data before the company throttles, or slows down, the wireless connection.
Customers can pay an additional $15 a month to turn the iPhone into a wireless hot spot. The device gets 3.5GB of data a month before it is throttled.
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The iPhone will be available on June 29.
The introduction of the iPhone to one of Sprint’s prepaid arms should help fulfill the carrier’s large commitment for iPhones from Apple. Sprint made a costly bet that the iPhone would turn around its subscriber growth prospects, and is hoping to get the same benefit on the prepaid end as well.
Sprint disclosed in a filing with the Securities and Exchange Commission that the Virgin Mobile iPhone wouldn’t have a material impact on its adjusted operating income before depreciation and amortization this year.
Unlike Cricket, Sprint doesn’t appear to be subsidizing the iPhone at all for Virgin. Sprint’s contract version of the iPhone costs $199.99 for the 16GB iPhone 4S, and $99.99 for the iPhone 4. Leap, however, is selling its iPhone at a slightly discounted price, with the iPhone 4S selling for $499.99 and the iPhone 4 selling for $399.99.
Prepaid phones typically come with little to no subsidy because customers don’t have to sign a contract and are free to leave whenever they want.
Analysts have said they see a modest benefit to Sprint bringing the iPhone to its prepaid arm, since it helps Virgin Mobile stay competitive with its prepaid competitors.
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