News 1999
Virgin Slashes Mobile Costs by a Third
11/11/1999
The cost of using a mobile phone has been slashed by more than a third following the launch of Virgin Mobile's no-nonsense, great value service.*
With Virgin's single, straightforward tariff, the more people use their phone the cheaper it gets. Each day calls cost just 15p per minute for the first ten minutes, 10p for the next ten minutes and 5p a minute for up to 23 hours and 40 minutes after that.** If you don't make a call, you don't pay a penny.
In addition to cost savings, Virgin Mobile brings much needed clarity to the market, offering the same deal to every customer and on every phone. The tariff is the same for local, national and Virgin to Virgin calls and, since there's no peak or off-peak rate, people can at last afford to make calls at whatever time of day they like.
Let's face it, when you buy a mobile, you're not sure how often you are going to use it - now it doesn't matter. Other networks manipulate their customers to use the phone when it suits them - make a call at the wrong time of day and it can cost anything up to £5 for a ten minute call. Traditionally, you only get the cheapest rates when it suits the phone company (i.e. when you're asleep). With Virgin Mobile there are no straitjackets, just clear, transparent pricing. Customers enjoy the freedom to get cheap calls when they want, any time of day, which means overall they get the best value on the market.
Virgin Mobile customers pay no ongoing monthly fees, no line rental, no service charges and sign no contracts, because the company sells its handsets at their true cost. Because Virgin doesn't subsidise the cost of the phones, this means there's no need to tie customers to a contract, or make them pay a daily charge, or suffer any other nasty.
"In the UK, our rivals heavily subsidise their phones, which means they come with an additional and hidden price tag. You can pay up to £600 a year just to be able to make or receive a call," said Richard Branson, chairman of Virgin Mobile.
"It's a crude marketing strategy by mobile companies. They think that putting 'free' often enough in their advertising means people won't notice they're being charged extra for their calls - it's a shabby way to treat consumers. In other parts of Europe, research shows that where phones are subsidised call costs are invariably more expensive."
Overseas rates on Virgin Mobile offer outstanding value, with calls to America and Australia costing 20p a minute, which is even cheaper than BT's weekend rates. Calls to Europe cost 40p a minute. The potential savings of phoning with Virgin Mobile are massive.
Customers can choose the most convenient way to pay:
- Pay As You Go, with £10 or £20 vouchers available from thousands of outlets;
- Pay As You Go, by topping up air time with a credit or debit card over the phone or on the web;
- 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.
While the popularity of pre-pay phones has boosted mobile ownership - four in five new phones sold are pre-pay - it has left many users shocked at the exorbitant cost of anything more than occasional phone use. Virgin Mobile today proves it is possible to significantly cut phone bills and provide up-to-the-minute, state-of-the-art phones into the bargain.
Said Tom Alexander, managing director of Virgin Mobile: "Customers who choose to pay as they go, with vouchers, have in the past been treated like second class citizens.
Some other networks have talked about bringing pre-pay charges into line with subscription customers then done nothing about it. We at Virgin Mobile are leading the way, setting the standard which others will struggle to follow."
Virgin Mobile is a joint venture owned 50:50 by Virgin Group and One 2 One.
*Source: Virgin Mobile analysis based on average call patterns taken from: 'A Price Index for Mobile Telephony. A report for Oftel' by National Economic Research Associates.
**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.
