News 2001
Sprint and Virgin announce joint venture
05/10/2001
New Company Targets Pay-As-You-Go Wireless Service to the Under-30 Segment of U.S. Consumer Market
Sprint (NYSE: FON, PCS) and the Virgin Group today announced a joint venture to offer pay-as-you-go wireless communications services and handsets to the U.S. market under the Virgin Mobile brand using Sprint PCS' all-digital, all-PCS nationwide wireless network. The formation of Virgin Mobile USA through the joint venture creates a new national wireless service provider targeting the 15- to 30-year-old consumer market in the U.S. Virgin Mobile USA expects to launch its services in select markets and complete a nationwide rollout during the first half of 2002.
"We are extremely pleased to partner with the Virgin Group. Their focus on pay-as-you-go wireless service for young Americans under the age of 30 should allow Sprint PCS to quickly and cost effectively penetrate this market segment in a way that is complementary to our efforts," said Charles E. Levine, President of Sprint PCS. "Combining the clarity and coverage of the Sprint PCS nationwide network with a powerful youth-oriented brand like Virgin is expected to add users to our network and effectively capture an even larger portion of the relatively untapped market of young wireless users."
"Virgin's strategic venture with Sprint enables Virgin Mobile USA to be the first Mobile Virtual Network Operator (MVNO) in the U.S.," said Sir Richard Branson, chairman of the Virgin Group. "We are the fastest growing mobile phone business in the U.K., and we will leverage our strong brand recognition as well as our consumer-savvy marketing machine to satisfy the needs of a U.S. market that demands customization."
Virgin Mobile USA will cater to a target market of young Americans between the ages of 15 and 30 by providing simple, all-inclusive, pay-as-you-go wireless communications services and diminishing the responsibilities of monthly bills and credit applications. According to The Strategis Group, the 15- to 19-year-old wireless consumer market is projected to increase 184 percent by 2007, and the 20- to 29-year old wireless consumer market is expected to increase 93 percent during the same timeframe.
Virgin Mobile USA's products and services will include long distance and nationwide coverage in addition to Virgin Xtras, a distinctive set of features that will provide access to additional services tailored for the U.S. consumers' fast-paced, entertainment-focused, music-centric lifestyle. Virgin Mobile USA products and services are expected to be distributed nationally through premier retailers that focus on servicing the under 30-consumer market.
Under terms of the agreement, Sprint PCS and Virgin will initially have an equal interest in and mutual governance roles for Virgin Mobile USA. Sprint PCS will make a $50 million contribution of services to the joint venture and Virgin will invest $50 million in cash.
The Virgin Mobile USA board of directors encompasses vast wireless industry knowledge and a proven record of launching and growing wireless communications business and services. Virgin Mobile USA's board of directors consists of six members - three from Virgin, three from Sprint PCS including Chairman Sir Richard Branson and Virgin Group Strategy Director Gordon McCallum, Virgin USA Inc. Chief Executive Officer Frances Farrow, Sprint PCS President Charles Levine, Sprint PCS Chief Financial Officer William Gunter and Sprint PCS Vice President of Business Development and Planning, Bill Blessing.
About Sprint
Sprint is a global communications company serving 23 million business and residential customers in more than 70 countries. With more than 80,000 employees worldwide and $23 billion in annual revenues, Sprint is widely recognized for developing, engineering and deploying state of the art network technologies, including the United States' first nationwide all-digital, fiber-optic network. Sprint's award-winning Tier 1 Internet backbone is being extended to key global markets to provide customers with a broad portfolio of scaleable IP products. Sprint's high-capacity, high-speed network gives customers fast, dependable, non-stop access to the vast majority of the world's Internet content. Sprint also operates the largest 100-percent digital, nationwide PCS wireless network in the United States, already serving the majority of the nation's metropolitan areas including more than 4,000 cities and communities.
For more information, visit the Sprint PCS web site at www.sprintpcs.com.
About Virgin
Virgin, a leading branded venture capital organization, is one of the most recognized and respected brands. The Company currently has 96 percent consumer awareness in Britain and is becoming a global brand name. The Company is involved in mobile phones, travel, financial services, fitness and leisure, soft drinks, music, holidays, cars, wines and publishing. Once a Virgin company is up and running, several factors contribute to making it a success: the power of the Virgin name, Sir Richard Branson's personal reputation, Virgin's management style, empowering employees to flourish within the group as well as the Company's unrivaled network of friends, contacts and partners. Virgin companies are a part of a family rather than a hierarchy. Each entity is empowered to run its respective affairs, yet Virgin companies function as a community with shared ideas, values, interests and goals. Virgin has created more than 200 companies worldwide, employing more than 25,000 people. Revenues around the world in 1999 exceeded $5 billion.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This press release includes certain estimates, projections and other forward-looking statements. Future performance cannot be ensured. Actual results may differ materially from those in the forward-looking statements. The words "expect", "believe" and similar expressions are intended to identify forward-looking statements. You should not place undue reliance on forward-looking statements, which speak only as the date of this press release. Sprint is not obligated to publicly release any revisions to forward-looking statements to reflect events after the date of this release or unforeseen events.
Sprint provides a detailed discussion of risk factors in periodic SEC filings.
For further information on Virgin Mobile:
Steven Day, Virgin Mobile, 07931 777777
Alison Bonny, Virgin Mobile, 07802 430276
Debra Burtt, Consolidated Communications:
07941 200 300
Julia Clark, Consolidated Communications:
07941 230 500
Email: press.office@virginmobile.com
For further information on Sprint:
Contacts:
Dan Wilinsky, Media Relations
Sprint PCS
(913) 762-7017
PCS: (913) 221-9050
Dwilin01@sprintspectrum.com
Jeff Nead and Kristi Gates, Media Relations for Virgin Mobile USA
Glodow Nead Communications
(415) 447-1241
kristi@glodownead.com
