Sprint dumps Virgin Mobile Custom brand, but keeps ItsOn technology and Walmart partnership

Sprint (NYSE: S) is abandoning its Virgin Mobile Custom prepaid brand but is sticking with the ItsOn cloud technology behind that brand and its retail partnership with Walmart. Sprint launched Virgin Mobile Custom in August exclusively through Walmart but found that consumers were confused about their rate plans.

In response, as part of the regular Virgin Mobile brand, Sprint on Jan. 17 is launching shared data plans exclusively through Walmart that the company hopes will help simplify the rate plans and value proposition of the offering. Crucially, customers will be able to allocate shared data between family members on the plans. The launch represents the first time that a Tier 1 carrier has brought data sharing to the prepaid market; the concept has been the province of operators' postpaid brands.

Angela Rittgers, vice president of Sprint Prepaid, said that Sprint has been working with Walmart on how to improve the Virgin Mobile Custom brand's traction. The brand was based around allowing customers create a mobile service plan they could customize on the fly. Rittgers called the new plans an "evolution" of the Custom brand.

In an interview with FierceWireless, Rittgers said that "the flexibility that that [Custom] product provides is phenomenal," but that in Walmart there were not enough retail sales representatives to explain the benefits of the product to consumers, which led to confusion. As a result, Sprint decided to simplify the product's rates while keeping all of the flexibility and benefits of the platform on the back end.

With the ItsOn technology, the primary account holder can choose how much data certain family members get access to. For example, a parent can say that their children can only get 20 percent of the total data plan, or each child can get 1 GB. Those changes can be altered throughout the month. Rittgers said most consumers like the concept of shared data plans but complain that there is one family member who is a data hog, and the ItsOn platform gives consumers the flexibility to deal with that situation.

The plans come with a preloaded Virgin Mobile app that enables customers to manage data sharing directly from their device. They can also purchase 1 GB of data for $10 per month with one click from their device. Additionally, for $5 per month customers can access apps such as Facebook, Twitter, Instagram and Pandora on an unlimited basis without that usage counting against the customer's data allotment. The plans also have flexible international calling options and parental control features.

"Once you play with it, it's completely understandable," Rittgers said. However, she conceded that Walmart did not have enough sales reps pushing the plans and that consumers "were having a hard time grasping, what is my rate plan?"

Rittgers said Sprint is sticking with Walmart as a partner because it has the single largest share of prepaid wireless sales in the U.S. "Knowing much how much volume of prepaid sales they do, we think it's important to make sure we have the presence there and a great offering," she said.

Sprint said the new shared plans will be available on four specific LTE smartphones. Additionally, every multi-line plan will also come with a free mobile hotspot feature.

The new shared data plans are as follows:

  • $65 per month for two lines with unlimited voice, texting and 4 GB of shareable data.
  • $90 per month for three lines with unlimited voice, texting and 8 GB of shareable data.
  • $115 per month for four lines with unlimited voice, texting and 12 GB of shareable data.

The shared data plans will be immediately available on updated editions of the HTC Desire 510 ($99.88), LG Tribute ($79.88) and LG Volt ($149.88), as well as the new Samsung Galaxy Core Prime ($129.88). The Galaxy Core Prime runs on Android 4.4 KitKat, and sports a 4.5-inch display, 1.2 GHz quad-core processor and a 5-megapixel rear-facing camera. More devices are expected to be introduced by the end of February.

Additionally, Virgin Mobile is also launching new plans for individuals available only at Walmart. Those plans are:

  • $35 per month for 300 voice minutes, unlimited texting and unlimited data (speeds are throttled after 2.5 GB of usage)
  • $45 per month for unlimited voice, texting and data (speeds are throttled after 2.5 GB of usage)

Sprint notes that a $20 starter kit is required to activate each new line of service. Interestingly, the plans include two months of unlimited music streaming that won't count against the customer's data allotment. 

There are some caveats with the data usage on the plans as well: The unlimited features are while consumers are on Sprint's network. Video streaming may be limited to 3G speeds and 3G/LTE speeds are subject to device/coverage availability. Once a shared data plan's applicable data threshold has been reached, the plans' data access ends and consumers must purchase more data. Once a single-line plan's applicable data threshold has been reached, speeds will be slowed (including video) to 2G speeds for remainder of the billing cycle.

Rittgers acknowledged that the prepaid market has become more competitive in recent months, with new offerings from T-Mobile US (NYSE:TMUS), including its new "Simply Prepaid" plans starting at $40 per month, as well as renewed energy from AT&T Mobility's (NYSE: T) Cricket prepaid brand.

"The Tier 1 providers have gotten more aggressive in prepaid over the last six months," she said. "As we look at our portfolio of brands, we think we're well positioned...as the best value in wireless on the prepaid side of the house."

For more:
- see this release

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