AP Technology Writer
POSTED: 5:51 a.m. HST, Jun 7, 2012
NEW YORK » Virgin Mobile, one of Sprint's brands for prepaid, no-contract phone service, said Thursday it will start selling the iPhone on June 29, charging $549 for a basic model.
The high price of the phone comes with an upside: service will start at $30 per month.
That means the phone, plus two years of service, will cost $1,269, excluding taxes. That's nearly $800 less than a subscriber would pay for the same phone, an iPhone 4 with 8 gigabytes of memory, if buying it under the Sprint Nextel Corp. brand. Sprint charges $100 for the phone and $80 per month for service, excluding taxes.
The iPhone has until recently been restricted to contract-based plans. Now, the floodgates appear open for the phone to enter the prepaid, no-contract market, which is aimed at people with low incomes and poor credit. However, the high initial cost of the phone is likely to be an obstacle. Virgin Mobile sells other smartphones for as little as $80.
Last week, Leap Wireless International Inc., the parent of the Cricket prepaid service, said it would start selling the phone on June 22, starting at $400 and $55 per month. Leap's CEO said the phone would likely account for about 10 percent of the phones it sells over the next few years.
In addition to the iPhone 4, Virgin Mobile USA will sell the iPhone 4S, the model launched last year, for $649 with 16 gigabytes of memory.
Virgin Mobile's cheapest plan cost $35 per month, with a $5 discount possible for buyers who set up automatic monthly payment with a credit card, debit card or PayPal account. It provides 300 minutes of calling per month and unlimited texting. Data usage is also "unlimited," but is slowed drastically after the customer has used 2.5 gigabytes since the start of the billing cycle. IPhones with "Sprint" service have true unlimited data.