Virgin Mobile Joins Prepaid Price War

PETER SVENSSON

NEW YORK (AP) — Virgin Mobile USA Inc. is set to announce Thursday that it is slashing the price of its unlimited calling plan to $50 from $80 per month, a result of fierce competition and price-cutting among second-tier cellular carriers.

The drastic price cut at Virgin, which has 5.4 million subscribers, is a sign of the continuing disruption caused by MetroPCS Communications Inc. and Leap Wireless International Inc., which both provide unlimited prepaid service for $35 to $50 per month in limited areas.

MetroPCS has been expanding recently into big markets in the Northeast, like Boston and New York.

In January, national carrier Sprint Nextel Corp. introduced a $50 unlimited plan under its own prepaid brand, Boost Mobile, to counter that threat.

Virgin Mobile spokeswoman Jayne Wallace said its price cut is "definitely a response to the marketplace."

The company uses Sprint's network to provide service and recently renegotiated its rates, enabling it to lower prices while getting a chance to improve its financial performance, she said.