July 28, 2002

2:32 PM

This past week (Sir) Richard Branson (otherwise known as "That Nutty Billionaire"), showed that corporate disclosure is a good thing, as he stripped bare, except for a muscle suit, to launch the U.S.'s first Virtual Phone carrier, Virgin Mobile.
posted by benjh (33 comments total)

Using Sprint PCS's backbone, they've created a wireless carrier with no build of infastructure, and are targeting the 18-30 year old market, with blitzes on MTV and other demographically sound outlets.

Their method is to create a "cool" service where the other's are targeting businesses. (Oh, and not to mention the fact that many of their promotional materials feature early 20s eye candy.)
posted by benjh at 2:39 PM on July 28, 2002

Wasn't "Live by your own rules" a Burger King slogan? Or was it an Enron slogan? Aren't rules more in vogue now?
posted by raysmj at 2:41 PM on July 28, 2002

Nice selection of phones. Not.
posted by donkeyschlong at 2:49 PM on July 28, 2002

Virgin of course is made up of a network of several hundred offshore companies with complicated interrelations that allow them to move money between the various divisions without having to pay tax anywhere
posted by kerplunk at 2:55 PM on July 28, 2002

I'm with the schlong on this one.
posted by monju_bosatsu at 3:09 PM on July 28, 2002

Who needs these new-fangled phones that don't even have the "special" features promised in place when you can go buy an mp3 player and listen to the music you choose? If only that damn RIAA and sadistic record companies weren't trying to make things difficult.

"If you're going to treat it [music] like a product, people are going to steal it like a product." - musician Ron Hawkins
posted by twos at 3:10 PM on July 28, 2002

Richard Branson strikes again! I wondered what had happened to him, and assumed he has just quietened down in his old age. Here is a businessman in the truest sense of the word. He rarely takes no for an answer, and he turns things into a success, even if he has to make some compromises.

Even more interesting is the way he has kept the companies private, except for a short stint on the stock exchange in the 80s.

Read his autobiography. It's very entertaining and provides a great insight into the backstabbing in the airline industry, and lots of delightful business stuff. It's great to see how he went from selling budgerigars to becoming a billionaire.

In short.. it took bullsh*t, balls, and determination. He is my hero.
posted by wackybrit at 3:12 PM on July 28, 2002

From the coverage area page:

We have a great coverage area, but if you wander out of it your phone is not going to work. Don't panic. Your voicemail and text messages will be waiting for you when you get back.

Yeah. That's exactly what I want from a mobile carrier. Sorry, but I'll stick with one that has a national network.
posted by dogmatic at 3:18 PM on July 28, 2002

It's Sprint's network, aren't they national?
posted by benjh at 3:25 PM on July 28, 2002

It's essentially a rebranded SprintPCS, yes.
posted by donkeyschlong at 3:30 PM on July 28, 2002

that allow them to move money between the various divisions without having to pay tax anywhere

That's brilliant. As taxes become more and more onerous, expect to see much, much more of this.
posted by insomnyuk at 3:50 PM on July 28, 2002

Oh, cool, you have mobile phones in the US now. *hehe*
posted by dagny at 4:05 PM on July 28, 2002

I'm not sure if you were being sarcastic, insomnyuk, but yes, it is brilliant.

Tax ethics work like this:

If it's legal and it benefits you, then it's the proper thing to do.

Only a total moron pays a cent more tax than they have to. Tax evasion is illegal, but it is certainly fine (and, IMO, honorable) to reduce your tax bill by using legal methods. A dollar not paid in tax is a dollar you can spend, which helps the economy no matter what happens.

So, do you want to help the economy and yourself? Or do you want to help the government write out welfare checks? I know where my loyalties lie.
posted by wackybrit at 4:16 PM on July 28, 2002

Guy's Virgin Mobile's been going for a few years now in the Uk with the same proposition (and I think they've just launched in Aus). It's pretty cool and rather cheap and a load of my friends got into it. The one problem they had was that it was absurdely expensive to call non Virgin mobile mobile phone users (which is an exceedingly convoluted way to say - everyone else).

This hampered their subscriber growth quite a bit, at least in the heavily penetrated UK mobile market. Not sure what sort of an effect this will have on them in the less mature US market.

Other points to note. Foreign Virgin Mobile users wont be able to roam onto the PCS network they're using in the US. This isn't very simple, it isn't very Virgin. It's another advantage that T-Mobile has, even though they paid stupid money for Voicestream. Aaahh the hegemonic beauty of GSM.
posted by nedrichards at 4:54 PM on July 28, 2002

Nice selection of phones. Not.

Uh, no kidding. Maybe I am really naive about cell/mobile phones, but I've never heard of Kyocera. And boy, those names are creative. I've always wanted a phone called "Party Animal" or "Sangria".
posted by puffin at 5:19 PM on July 28, 2002

Maybe I am really naive about cell/mobile phones, but I've never heard of Kyocera

IIRC, they're a pretty big Japanese company that is more known for its ceramics products. They established their cell phone division by buygin Qualcomm's (inventor of CDMA) mobile phone division.
posted by gyc at 6:03 PM on July 28, 2002

wackybrit: nope, I wasn't being sarcastic :)
posted by insomnyuk at 6:12 PM on July 28, 2002

$0.25/minute for the first 10 minutes. Every day. Then it drops to $0.10/minute.

So assuming you talk everyday on your phone for more than 10 minutes, your minimum monthly bill for 300 minutes (10 minutes x 30 days) will be $75.00. I like how they don't offer you simple minutes/month information, so you can compare apples to apples without having to do some calculations.

For $75.00/month, I can get 1000 anytime minutes at SprintPCS.com. Hmmm, 300 versus 1000. I dunno, it just seems so... obvious this is bound to go down like the Titanic and Virgin Cola.
posted by yarf at 6:49 PM on July 28, 2002

Kyocera are well known for printers too, or at least they were once. ;-)
posted by wackybrit at 7:15 PM on July 28, 2002

Correct me if I'm wrong, but isn't this just pre-paid mobile phone service, a la Verizon's Freeup? The two seem similar in kind, with only the details differing.
posted by EatenByAGrue at 9:34 PM on July 28, 2002

It's sort of pre-paid, I think. A mate who's moved to the US has signed up for it because he spent a month being treated like a peasant by the established carriers.

The limited phone range, I'm told, is down to the screwed-up system in the US of competing and incompatible network standards, whereas Virgin Mobile competes in the UK by piggy-backing on the one2oneO₂ network which uses the same GSM standard as everyone else. Giving USAians a phone service that isn't tied to the silly contracts and minutes thing is an innovation, but it's a pity that they haven't been able to get around the absurd 'pay for incoming calls' thing. (yarf: this isn't really meant for the '10 minutes a day' crowd, just as pay-as-you-go in the UK isn't meant for users who use their mobiles enough to benefit from a contract.)

As for Virgin's baroque financing, well, you just have to read Private Eye to see that it makes Mohamed Fayed look like an amateur.
posted by riviera at 4:25 AM on July 29, 2002

The only thing interesting about this service is that eventually, pre-paid cellular will make pay phones obsolete.

PS: I don't think the Virgin brand is terribly recognized by the youth of America.
posted by ParisParamus at 4:26 AM on July 29, 2002

raysmj, the BK slogan a couple years back was Sometimes you gotta break the rules.

Eaten: Yes, and there are already plenty of pre-paid mobile services; in the Midwest, Ameritech/SBC sells theirs at convenience marts. But again, the difference is investment in infrastructure. They can keep rates just competitive, and make a lot more money (or roll it back into marketing).
posted by dhartung at 4:32 AM on July 29, 2002

it's sprint wrapped in a british flag. anglophile bait, mostly. but it's still sprint.

i had a sprint phone once. now i don't. and i never will again.
posted by grabbingsand at 10:12 AM on July 29, 2002

dhartung: I know. I was being a wise-ass. Countless others used the "break the rules" type of thing in recent years. It's a cheap way to make yourself sound all now and edgy. As in, "The rules of making money have changed." Some financial services firm ran that one in the past year or so. Turns out they were at least half right.
posted by raysmj at 10:32 AM on July 29, 2002

riviera: The customer service of my US cell phone company is deplorable, and I've been caught in a couple of Kafka Lite situations with them, yes I'm treated like a peasant, but I still get 3000 minutes of post-8 p.m. and weekend calling. That's a much sweeter deal than Virgin, even if you don't have to sign a contract with some goofy corporate bureaucracy.
posted by raysmj at 10:48 AM on July 29, 2002

I had many Kafka Lite situations with Sprint when I was with them. Four months after canceling, I'm still waiting for them to send back the deposit they made me pay when I signed up (due to my, um, less-than-perfect credit). It was $120 but I get the feeling it'll end up being much more than $120 worth of pain-in-the-ass to get it back, so I'm ambivalent about pursuing it. I probably will, just because it's a not insignificant amount of money, but I will do it with much Sprint-loathing.

Voicestream recently made a minor mistake that resulted in my credit card dinging me with a $29 overlimit fee. (They were supposed to tell me that my change in auto-pay methods might not take effect for another billing cycle, and neglected to do so, so I went ahead and bought the MP3 player on that card, nearly filling it up, so that my VoiceStream auto-pay pushed me over my limit. I'm not sure how one can go "over their credit limit" -- if they can, it's not much of a limit, is it? Just an excuse to gouge me with another fee. But I digress.) Anyway, VoiceStream gave me a credit that covered most of it, which much impressed me. Sprint, I think, would have denied that they even made a mistake.
posted by kindall at 12:31 PM on July 29, 2002

kindall: SunCom, a reseller of AT&T, issued me a credit on a mistake too. But they did so in the most maddening way. I had a plan with 3000 nights and weekends plus no-additional-charge long distance, but only regional daytime local calling. A few months into the contract I went on vaction outside the region, so asked the company to switch me to a similar national plan for a month. An "in case of emergency" thing. Same night minutes, in other words, but more expansive local daytime calling. Ends up they switched me to no-night/weekends calling, so I ended up getting charged out the nose. Try $110, as opposed to the $55 I thought I'd be charged.

Anyhow, after several dramatic calls, I managed to work this out, and was told I would only owe $55. I promptly sent them a check. Imagine my costernation, then, when my bank statement showed that they had charged me $107 for the next month, after accepting the $55 check for the previous month just a few days before. I was charged $162 within 10 days.

Days pass. Four or five calls pass. They finally correct everything, and inform me that I won't owe them a bill for about four months, unless, say, I get nutty with daytime calling or roaming. I ask why they just can't send a check over already, since it only costs 37 cents and a smidgen of manminutes, and that this affects my cash-flow, but am told it's the system and although the supe will try to help, he can't make any promises.

Today, I get a bill for $123, but am told it was accidental, or rather sent out before all corrections were made, including their failure to put me back on my original plan. Didn't ruin that lime chicken salad I'd spent so much time on, though, so it was only a Kafka Lite situation, and not full-on Kafkaesque.
posted by raysmj at 1:50 PM on July 29, 2002

Oh, no. The $123 charge? Just got word. Ends up I've been credited another $83, and will probably be credited some more. Remind me not to change the service when I go on vacation again, given that it takes 18 customer service reps to get me back to my original plan.
posted by raysmj at 2:21 PM on July 29, 2002

riviera: one2one isn't now o2 it's t-mobile. o2 is what used to be btcellnet. much clearer, i think not.
posted by nedrichards at 4:21 PM on July 29, 2002

Indeed. And I stand corrected. (And am quite happy with Orange, because it's kept its name, and half-decent service, through three corporate owners.)
posted by riviera at 5:57 AM on July 30, 2002

dhartung, I don't necessarily agree with you about the difference being the investment in infrastructure, other than that there is a difference, unless Sprint PCS is letting Virgin use their infrastructure for free. The only difference is that instead of paying for infrastructure directly, they pay for it indirectly by paying Sprint PCS fees. Now, this may or may not be cheaper than building up your own network, although it's certainly more convenient. (See DSL resellers for an example for this not working well.) I believe Cingular currently has such a deal set up with Voicestream for the NYC market, and vice versa for Southern California. But in any case, assuming that Virgin Mobile wants to have a profit, a pricing floor exists for them that can't be less than the average cost per minute that Sprint PCS charges for using their network.
posted by EatenByAGrue at 9:11 PM on July 31, 2002

Oh, but in any case, regardless of the business structure from Virgin's point of view, my original comment had to do with how similar this was to the already existing prepay phones that exist from the consumer point of view. In which case, it appears that you agree with me that they are very similar, dhartung.
posted by EatenByAGrue at 9:15 PM on July 31, 2002