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 Thursday, May 09, 2013

Virgin Mobile announced a new price plan called “1,2,Free”, offering subscribers every third minute, SMS, or megabyte of data free.

Two “1, 2, Free” price plans have been announced: one focused on voice, and the other on SMS and data:

  • Free Talk: every third minute is free every day.
  • Free Surf and Text: every third SMS and every third Megabyte is free every day.

Call rates are 99c per minute, billed on a per second basis, while an SMS/MMS costs 50c each, and data is billed at 99c per mb.
 
CEO of Virgin Mobile, Jonathan Marchbank, explained that the “Free Talk” plan will be Virgin Mobile’s default pre-paid price plan, but that customers can change to “Free Surf & Text” by dialling *110*6# from their handset.
 
Subscribers can change price plans for free every 30 days.
 
“We have been waiting for the price wars to play out before announcing 1,2,Free just to see how low they would go – and then we launched a much simpler and transparent set of offers,” Marchbank said.
 
Marchbank said – “It’s not a promotion, it’s a core offer”.
 
Asked why they didn’t bundle the free minutes, texts, and data all together in one plan, Marchbank said that “the economics wouldn’t work” for them.

Further questioned about why they didn’t just cut their prices by a third, Marchbank said that it’s to encourage people to use.
 
“If you start selling at 66c I’m starting a price war I don’t particularly want to,” Marchbank said, adding that he doesn’t want to win customers only on price, but on brand.
 
Marchbank explained that if someone switches to Virgin because of the price, they’re easy to lose again.
 
Wireless Federation refers to these users as “Headless Chickens”. These types of users are more expensive to have on your network and it is better to lose them as their SAC is much higher and retention even more expensive!

Source: Wireless Federation.