“There’s a misperception that the prepaid market is only for people that are economically challenged. That’s not the case. Our expectation, based on preorders, is that the iPhone will do very well on Virgin.” These were remarks from Sprint Nextel Corporation (NYSE:S) CEO, Dan Hesse, at interview following Virgin Mobile’s (currently owned by sprint) move into the iPhone prepaid wireless market, reports Bloomberg.
Virgin Mobile, Sprint Nextel Corporation (NYSE:S)’s separately run brand, has joined Leap in the prepaid niche. Speculations are plethoric that the move will cause some ripples.
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Tomorrow, Virgin Mobile will officially open 10 retail stores in Chicago. The 10 new retail stores not only pass out as Virgin’s golden ticket into iPhone’s stake in the prepaid wireless market but also double up as a huge game changer with regard to strategy. According Jeff Auman, the vice president, Virgin initially banked on the services extended by retailers such as Best Buy Co., Inc. (NYSE:BBY) and RadioShack Corporation (NYSE:RSH).
Virgin’s new strategy, only previously carried out by Leap, stamps out the need for credit checks. It also eliminates the need for long-term contracts. This strategy typically introduces a rather interesting trade off; higher upfront prices for low rates and less commitment.
A gateway to national market
Though localized in Chicago, the new 10 retail stores could be the onset of a national roll out, said the company- that is Sprint.
This advancement will be a huge plus for Sprint as the company is finally beginning to take some notable steps since it acquired Virgin Mobile back in 2009.