Sprint’s Virgin Mobile is set to become the second carrier in the U.S. to offer Apple’s iPhone through their prepaid pay-as-you-go model. Analysts expect the less affluent to adopt the phone because prepaid services require no contract or credit checks for customers but others fear more people will enter a less regulated mobile space.
Pricing for the Virgin Mobile iPhone, which is set for July 1, is still unknown, according to a report by the Wall Street Journal. But Virgin Mobile currently has prepaid unlimited data plans that start as low as $35 per month.
"This contract-free model could help attract less affluent cellphone owners to the iOS platform, as well as those who are tired of paying premium prices on their monthly post-paid bill through other major U.S. wireless carriers," Wired.com’s Christina Bonnington points out. "It’s a smart move, as the prepaid market has a limited number of smartphone options," Bonninton added.
"It’s long been rumored that Apple was going to break into the contract-free market. While it’s exciting for users to have access to one of the industry’s most sought after gadgets, this move by Apple also shows that many smartphone users — especially those of color — are vulnerable to high prices and industry mood swings," said Colorlines.com’s Jamilah King.
"For many low income users of color, smartphones are a primary way to access the Internet, but the FCC has left management of those phones in a regulatory gray area in which phone companies are free to make their own rules," King went on to say. "If you’re paying more for less, that’s not exactly a good deal."
The pay-as-you-go market isn’t all that niche, either. At the end of 2011, about 1 out of 4 wireless subscribers used prepaid plans.
Sprint’s prepaid service, which also includes the Boost Mobile brand, has been the carrier’s lone area of growth as contract customers have fled, according to the Wall Street Journal.
Less Affluent Expected to Adopt iPhone When it Comes to Virgin Mobile, Insiders Warn Prepaid Market is Unregulated