Cricket and Virgin Mobile Take on the iPhone

By: Smartcomm

Last month, Cricket, a subsidiary of Leap Wireless, announced that it would start selling the iPhone 4 and iPhone 4S to prepaid customers on June 22 of this year. Unlike the top national carriers, Cricket has no contracts and offers its customers a lower per-month service bill, which currently runs $55 for unlimited talk, text and data.

Now, following suit, Sprint's Virgin Mobile will also be offering the iPhone with a very similar plan. A customer can get unlimited talk, text, and data on an iPhone 4 or iPhone 4S for as little as $50 a month (after all possible discounts are applied).

So what's the catch? Why isn't everyone joining Cricket or Virgin Mobile and cutting their monthly bill significantly? It's that don't-want-to-spend-a-lot-of-money-up-front syndrome. Signing up with either provider would mean purchasing the iPhone for its full market value price, which ranges from $499 to $649, versus the $99-$199 incentive price the bigger carriers offer.

It's all just a number game. If you purchase the iPhone 4S for $649 in order to forgo a 2 year contract, you would basically pay $18.75 a month for the phone over that span of time. Your monthly bill at that rate would be $73.75 at the most - still less than the cheapest rate out there for unlimited service. Since Virgin Mobile uses Sprint's network, it's practically the same as having the phone with Sprint. But customers don't always see the big picture.

Does our financing culture shape our decisions?

According to Jamie Lendino of PCMag.com, Americans "live in a culture of financing." It's true; many of us count on a low up front cost, with the ability to finance later. This is how carriers bank on getting new customers or keeping their current customers - by offering an incentive low price with the condition that the customer commit to two years of future payments. Carriers may take a hit up front, but they stand to benefit more for their services in the long run.

It will be interesting to see if Virgin Mobile or Cricket gains a lot of subscribers for offering the iPhone, or if shoppers will be deterred by the large up-front price tag.

2 comment(s) for “Cricket and Virgin Mobile Take on the iPhone”

  1. Johnny
    Right now I have Virgin Mobile but I don't know if I should switch to cricket or stay with Virgin because Virgin has Sprint's speed and cricket is just cricket the difference is the prices of the phones and the release dates cricket if you pre order online you will recieve it by the 22nd (tomorrow) and virgin mobile starts selling it till the 29 .
  2. Dana Maxwell
    Thanks for your comment Johnny. The quick answer is both Cricket and Virgin Mobile use Sprint's 3G network for the iPhone, so the coverage would fundamentally be the same. We wanted to address this in more detail, so feel free to read our newest blog that stemmed from your question. http://www.smartcommllc.com/wireless-blog/2012/6/splurge-for-an-iphone-with-cricket-or-virgin-mobile.aspx

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