Sprint’s iPhone-only Virgin Mobile strategy will put current Android customers in play

Dow Draper, president of Sprint’s prepaid wireless services, announced a promotion-filled relaunch of the Virgin Mobile USA brand in San Francisco. Virgin said it will offer only iPhone to customers.
Dow Draper, president of Sprint’s prepaid wireless services, announced a promotion-filled relaunch of the Virgin Mobile USA brand in San Francisco. Virgin said it will offer only iPhone to customers. AP Images for Virgin Mobile

Sprint relaunched its struggling Virgin Mobile USA prepaid wireless brand with an iPhone-only offer. The move puts Virgin’s Android fans in play.

Rival prepaid brands such as AT&T’s Cricket and T-Mobile’s MetroPCS will see Virgin customers who prefer the Android operating system to Apple’s iOS as candidates for conversion.

“I expect elevated churn from Virgin’s Android base, which comprises the vast majority of Virgin subscribers,” said Jeffrey Moore, an market analyst with Wave7 Research.

Moore said customers have many wireless choices – Straight Talk, Simple Mobile, Verizon prepaid, AT&T GoPhone, Boost Mobile, Total Wireless, Walmart Family Mobile, and Cricket Wireless – at the Walmart, Best Buy and Target stores where they find Virgin Mobile.

Virgin Mobile CEO Dow Draper said Thursday that he has plans for existing subscribers who prefer Samsung, LG, ZTE, Alcatel or other devices that run on Android.

They can stay on Virgin’s wireless service “as long as we’re around to provide it,” he said.

Expect them to be gone – or converted – before that happens.

The rub will come when they want, or need, to upgrade their phones and hope to stay with Android. Draper said Virgin has thought of that, too.

“We will still have Android devices in national retail through the end of the year,” he said, referring to the Walmart, Best Buy, Target and other outlets that sell Virgin Mobile.

Existing Virgin customers also can upgrade to new Android devices online using the My Account feature at Virgin’s website. Draper said that option will remain open “well into 2018.”

And, Sprint, where Draper also serves as president of prepaid operations, has “some migration strategies” to move Android-determined Virgin customers to Sprint’s Boost Mobile prepaid brand that continues to offer Android devices.

Although Virgin’s iPhone-only shift creates decisions for Android device lovers, Draper said it makes for a “frictionless” choice for new customers.

For starters, they now can sign up for Virgin at Apple retail stores. Buy a new iPhone, get a Virgin SIM card for it and watch the Apple clerk activate service in five minutes, Draper said.

The Virgin Mobile brand’s relaunch comes 18 months after Sprint put a lower emphasis on the slow-selling brand by pulling it out of the network of Boost Mobile stores. Boost has been Sprint’s more successful prepaid wireless brand and competes more directly with T-Mobile’s MetroPCS and AT&T’s Cricket prepaid brands.

Virgin’s iPhone-only strategy also includes only an unlimited data plan, contrasted with a choice in plans previously.

“The plan seems kind of Soviet to me,” Moore said. “Virgin chooses the OEM (phone manufacturer) for you, and Virgin chooses the plan for you.”

Draper said that might be true if customers didn’t have all those other wireless choices in the marketplace.

Moreover, the limited offer chose the options that he said make the happiest customers. Virgin has found that iPhone users stay with Virgin longer and that unlimited text, voice and data customers feel more at ease with using their services than those on limited minutes or data.

“It’s not about dictating,” Draper said. “It’s more about let’s just take away all the pain.”

Draper said also it leaves plenty of room for an admittedly “small fish” to sign up new customers in a large pond. He would not provide a subscriber count for Virgin, though Sprint has said it was the weaker brand in its prepaid offering.

The company’s new offering is packed with promotions called the Virgin Inner Circle. Existing customers who buy a new iPhone will receive 6 months of unlimited talk, text and data for $1 and a number of discounts with other Virgin-branded companies.

New customers who sign up by the end of July will get 12 unlimited months for $1. Normally, Virgin’s unlimited plan will cost $50 a month.

Refurbished iPhones will be available this fall.

Draper became CEO of Virgin Mobile during a shake up of Sprint’s prepaid wireless operations a year ago and more recently returned as president of prepaid. Jim Hyde is president of wholesale and affiliate partnerships.

In addition to the Virgin discounts, Virgin Mobile is donating the value of 10 means to Feeding America with each Inner Circle signing.

Sprint recently offered its own 12-month unlimited data plan for free, requiring customers to bring their own phone and limiting service to online help.

Mark Davis: 816-234-4372, @mdkcstar