News 1999
"No Catches, No Line-Rental, No Rip-Off"
11/11/1999
BRANSON LAUNCHES FAIR-DEAL MOBILE PHONES
Virgin Mobile launched last week. Virgin aims to bring its reputation as the consumer champion to this needlessly complex sector.
UK mobile phone users could save over £1.6 billion as a result of Virgin Mobile entering the market.* On average, mobile users will save more than a third on their calls by switching to Virgin Mobile, with its clear, transparent pricing policy.**
Virgin Mobile, the UK's first virtual operator and a 50:50 joint venture with One 2 One, has launched the simplest service ever seen in the UK. Phones are sold to the customer at their true cost, without any catches or hidden subsidies. Once customers are connected, they pay only for the calls they make. There is no line rental, no monthly fees, no ongoing charges, no vouchers that vanish and no high call charges. Consumers pay for what they use - if they make no calls, there are no costs.
Richard Branson, chairman of Virgin Mobile, said: "Virgin has a strong reputation for entering markets where consumers are getting a raw deal, where companies are profiteering on the back of consumer confusion. Virgin Mobile will stop the rip-off. The people of Britain deserve better - they want good service, cheap calls and clear, transparent pricing. Phones should be fun. We've done it with airlines and financial services, now we're going to do it with mobiles."
Virgin Mobile has just one, completely new style of tariff. Calls cost from 5p at any time of day or night. There are no peak or off-peak periods - and the more people use the phone each day, the cheaper it gets.
Simply, Virgin Mobile charges 15p for the first ten minutes each day, 10p for the next ten, and 5p for up to 23 hours and 40 minutes after that.*** "People can now use the phone when they want, how they want, for as long as they want," said Richard Branson.
This compares to current charging levels of up to 49p per minute. Unlike some rivals, customers can pick up voice messages in the UK for free - potentially saving hundreds of pounds a year.
By combining only the best elements of existing pre-pay and subscription tariffs and cutting out all the catches, Virgin Mobile has slashed more than a third off the average monthly mobile bill.**
"The current tariff structure is a sham. Pre-pay phones come with ridiculously high call charges and top-up vouchers, which are riddled with fiddles and disappearing airtime. Subscription contracts are no better, forcing people to sign away hundreds of pounds a year just to be able to make a call," added Branson. "However you look at it, mobile phone users have been bamboozled and short-changed. With Virgin Mobile, people pay for what they use and no more. We offer people the honest deal they deserve."
Tim Samples, Virgin Mobile's deputy chairman, said: "The arrival of Virgin Mobile into the market is great news for consumers. From today there are five consumer brands in the market ensuring more competition, greater choice and flexibility. Virgin Mobile's innovative range of services provides terrific added value and ways to communicate, all powered by the One2One network."
Phones will be sold through 300 Virgin Megastores and Virgin Our Price outlets, giving Virgin Mobile, the fifth operator, a bigger high street presence than any existing network or service provider chain.
Phones can also be bought direct from Virgin by calling 0845 6000 600, or logging on to www.virginmobile.com. 24 hour service, 365 days a year is just a phone call away.
There are three simple ways to pay for calls:
- Pay As You Go, by £10 or £20 vouchers (available from Virgin Megastores and Our Price, BP, Shell and Texaco petrol stations, Tesco, Sainsbury, Alldays, Safeway, Morrisons and Post Offices);
- Pay As You Go, by credit or debit card with a call to the customer centre, or by logging on to the Virgin Mobile web site;
- Pay Later, by direct debit. All we ask is that customers set up itemised billing for a one-off fee of £15 when paying directly from their bank account.
Unlike the other four networks, e-commerce will be an integral part of the Virgin Mobile service from day one. Each of the seven state-of-the-art, internet-compatible phones comes with a whole host of special Virgin services called Virgin Xtras.
Virgin Xtras prove that a phone is more than simply a device for talking and listening. It allows customers to experience the fun and convenience of entertainment, shopping, leisure and music direct over the phone. At the press of a button, customers can get substantial savings on Virgin Holidays and Virgin Sun, special offers on Virgin Atlantic flights, discounted CDs, a special rate for the RAC's new Red breakdown service and more.
A handsfree headset worth £14.99 and free internet access are included with every phone. There is a one-off connection charge of £12.50, which gives a lifetime of Virgin Mobile service.
The launch is being backed by a £20 million advertising campaign covering national TV, press and posters.
The advent of Virgin Mobile is nothing less than a mobile revolution.
For further information please contact:
Steven Day, Virgin Mobile:
020 7 4844322 or 07931 777 777
Will Holt, Consolidated Communications:
020 7208 2723 or 07941 200 200
Debra Burtt, Consolidated Comunications:
020 7208 2714 or 07941 200 300
* According to Oftel, UK mobile customers spent £3.5 billion on calls and line rental charges last year, equating to 12.9 billion minutes of airtime. Had these minutes been spent on the Virgin Mobile service, the total cost would have been £1.9 billion, a saving of more than 40 per cent.
** This assumes UK customers' monthly average usage level and average mix of call types. (Source: 'A Price Index for Mobile Telephony' a report for OFTEL September 1999, prepared by National Economic Research Associates) Our calculation excludes the cost of handset purchase, any connection charge and charges for additional options. Calculations correct as at 8.11.99.
*** Daily call trigger begins at 4am, when most people are asleep, allowing customers to continue to make calls after midnight, before going back to bed, at potentially the cheapest rate of 5p a minute.
