Homes and Property | Home Page

Virgin steps up phones war

Evening Standard
13 April 2012

VIRGIN Mobile launched its latest attempt to shake up the market today by declaring it will go head-to-head with the four main mobile operators and start offering monthly contracts.

It has built a five-million strong UK customer base since its launch in 2000, but exclusively in the lowmargin, pre-pay market where there is little customer loyalty.

From this weekend, Virgin will be selling monthly contracts and is pledging to give people the option of regular new phones or lower bills.

'At the end of your typical 12-month contract, other networks do not tell you that you are out of contract and that you have finished paying for your handset,' said spokesman Steven Day.

'What we will do is automatically cut your monthly bill - and that will be by up to 50% - unless you want a new handset.'

Chief executive Tom Alexander said: 'We said at our flotation last July that we'd launch a consumer contract which offers something special and different and today we've delivered on those promises.'

Virgin Mobile, still majority owned by Sir Richard Branson, piggybacks the T-Mobile mobile network. Offering contracts is aimed at poaching customers from T-Mobile, Vodafone, O2 and Orange, as well as at migrating its own pre-pay customer base.

Around two-thirds of non-company mobile phone users are on prepay, but the one-third who are on contracts are far more lucrative, accounting for around two-thirds of the industry's revenues.

Shares in Virgin Mobile slipped 1p today to 203p, extending their recent falls from a high of 280p earlier this year.

MORE ABOUT

Mobile Phones
Orange
T-Mobile
Virgin
Vodafone