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Sprint Nextel Buying Virgin Mobile Prepaid Service

The world of prepaid wireless-phone services is getting a little smaller: Sprint Nextel announced this morning that it would buy Virgin Mobile USA for $483 million in stock.

Sprint, of Overland Park, Kan., said it plans to market that Warren, N.J.-based firm's prepaid services alongside its existing Boost Mobile offering.

My colleague Cecilia Kang notes in her story that prepaid service -- in which users sign no contract up front and either pay for a bucket of minutes that they can use up over time, or pay month-by-month for a plan with a set allotment of minutes -- has done well for Sprint as it recovers from the aftermath of its 2005 merger with Reston-based Nextel. (Funny how these high-profile tech mergers never quite seem to work out.)

But how will Sprint sell these two apparently overlapping services? Both offer comparable pay-as-you-go options (Boost, Virgin) starting at 10 cents a minute; both (Boost, Virgin) also sell unlimited talk/text/Web plans for $50 a month. Both also employ the kind of edgy, Gen-Y marketing pitches that can make a Gen X-er such as myself feel a little old.

The key differences between them, as PC Magazine's Sascha Segan explains in his take on the purchase, lie in the technology each service runs on. Virgin uses Sprint's regular CDMA network; Boost employs the older Nextel iDEN network, which provides walkie-talkie push-to-talk communication but only permits a slow Web connection. As one result, Virgin Mobile tends to offer a more interesting selection of phones.

Considering that iDEN doesn't have much of a future in general -- no other major U.S. carrier uses it, and it has no realistic upgrade path -- it would be no surprise to see Virgin Mobile and Boost eventually merge into one CDMA-based service. And this deal can only smooth the path for something like that.

As it happens, I've been planning to take a look at unlimited prepaid services -- locally, Cricket Communications provides another set of all-you-can-talk options -- so this news comes at an interesting time. In other words, I'm glad this didn't break the week after I'd run that story... now I'll just need to wait a bit to see what details emerge about Sprint's intentions.

In the meantime: Do you use a prepaid wireless service from Boost, Virgin or another firm? What led you to choose it? How has that worked out for you?

By Rob Pegoraro  |  July 28, 2009; 12:31 PM ET
Categories:  Telecom  
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Comments

And then there is the new government program that supplies free cell phones for people on disability and senior citizens. I think it is worth mentioning. The phones are actually TracFones. I know two people -- one on social security disability, and another, a senior citizen. The way the program works in our state is that each month on the 1st of the month, 68 free minutes are automatically put on the phone. (If a person needs to have more TracFone minutes, they can be purchased at a store easily.) There truly is no expense to the person who qualifies for the phone. Someone may need to help them set up the phone, but it is a pretty decent free phone -- see the photo on the website. Here is the link to the government website: https://www.safelinkwireless.com/EnrollmentPublic/home.aspx

Posted by: rjrjj | July 28, 2009 12:54 PM | Report abuse

I'm interested in hearing about this from all the edgy Gen-Yers who comment on this blog. What's that? Oh. I see.

Posted by: HoyaParanoia | July 28, 2009 1:51 PM | Report abuse

Thanks rjrjj. I had no idea of this. I can think of a couple of folks that might qualify.

Posted by: tbva | July 28, 2009 4:42 PM | Report abuse

A couple of years back, I had difficulty with AT&T and dropped their service. While trying to decide on another carrier's service, I picked up a $50 phone at my local drugstore for interim use. Its service is STi Mobile and it's been terrific. It's easy to refill from the company website, and I get an e-mail whenever my balance runs low. As a member of Generation W or maybe V, I don't use a cell a lot, but it works for me.

Posted by: hughabramson | July 28, 2009 8:18 PM | Report abuse

i have a TracFone that i use for emergencies & to receive calls for work as a Union stagehand. since i mostly work from home, my landline w/ DSL is used most often. it can take me 6-8 weeks to use 90:00 of talk time. i have a 1st-gen iPod touch & a MacBook for email, web, etc...

Posted by: dkjazz3 | July 29, 2009 6:59 AM | Report abuse

Funny thing is that the VM plan is ideal for us old folks too. Since my wife and I are both retired we only need one cell phone. We do not use it very much so could never use all the minutes in the normal plans. The great thing about VM was that the prepay doesn't expire and you only need to plus up once every 3 months. That bring your monthly cost down to under $10. I sure hope Sprent Nextel doesn't screw this up....

Posted by: chas3 | July 29, 2009 12:10 PM | Report abuse

My wife and I have ATT "pay as you go" (prepaid deal), both my daughters have T-moble prepaid, my parents have virgin mobile prepaid, my mother-in-law has tracfone prepaid. Prepaid is great. It's 10c a minute that lasts 1 yr if you get the $100 cards, and if you don't use it all it rolls over with just buying another card at the end of the year. Even for my daughters ( I admit they are unusually frugal for teenagers ), they don't even go thru the 1000 minutes in the year that the $100 card gets them, let alone us old fogeys. Why pay a min of $30 a month for a service plan for even just one phone ( $360/yr )if you're not going to use it more that 3600 min. in a year (~ 10 min. per day every day of the yr equiv of prepaid)

Posted by: MinCT | July 29, 2009 1:22 PM | Report abuse

My wife and I have used Tracfone for four years with no problems. Phone(w/o camera) costs $15.00/20.00. A years subscription of time costs $111.00 and free minutes come with that. Phone with camera can be had for $25.00. If you upgrade phone, minutes can be transferred free to new phone. There are always promos where you can pay your phone forward for extra minutes, etc which means we never run out . I use it to call foreign countries with no problems at all. I don't have any connection with Tracfone but their number is 800-867-7183.

Posted by: 2rld8 | July 29, 2009 4:56 PM | Report abuse

We use ATT and pay $100 each year. With one of their plans you can talk to any other ATT Mobility user for free, except it is $1/day if you use the phone at all during that day.
So we can call each other and talk all day for $1 on her plan and regular minutes on mine and it costs an average of $8 per month. Since I am on an old plan from ATT, I pay $30 per month and we never run out of minutes. And as was mentioned, the minutes carry over when you recharge after a year.

Works for us.


Posted by: eteonline | July 31, 2009 9:31 AM | Report abuse

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