Sprint is officially pulling the plug on its decaying Virgin Mobile prepaid service and will transfer current customers to its Boost Mobile brand starting in February.
The move doesn’t come as a complete surprise as Sprint has long been pulling back marketing and distribution for the brand, most recently in October severing ties with Walmart as a distribution partner. Since then Virgin Mobile could only be purchased through an online portal, as Walmart was the last remaining brick-and-mortar sales channel, following earlier decisions in 2019 to pull the brand from Best Buy stores and Meijer.
These moves were noticed by Jeffrey Moore at Wave7 Research, who previously predicted that Virgin Mobile was not long for this world. Back in November he told FierceWireless that it had been 31 months since Virgin Mobile had changed its rate card and the brand’s press portal hadn’t seen an update in 19 months.
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“I don’t think anyone knows how severely in decline Virgin is,” Moore said at the time. “There’s been no energy put into Virgin over the last several years. Virgin is a dying lemon on the vine.”
The decision to discontinue Virgin comes as Sprint and T-Mobile are in the final stretches their pending megamerger as the pair await a decision from U.S. District Judge Victor Marrero in an antitrust trial brought on by a coalition of state attorneys general suing to block the deal.
The U.S. Department of Justice already blessed the merger, but conditions include deals with Dish Network to acquire Sprint prepaid assets, including Virgin and Boost Mobile, and certain spectrum to lay the foundation for the satellite TV provider’s entry into the wireless market.
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In regards to timing, a Sprint spokesperson said in emailed comments: “We regularly examine our plans to ensure that we’re offering the best services in line with our customer needs. Beginning on the week of Feb. 2, we will be moving Virgin Mobile customer accounts to our sister brand Boost Mobile - consolidating the brands under one cohesive, efficient and effective prepaid team.”
“In most circumstances, customers can keep their current phone and will receive a comparable or better Boost Mobile service plan with no extra cost,” the spokesperson added.
Tammy Parker, senior analyst at GlobalData, indicated it could be good news for Dish, as the company looks to offer wireless service in 2020 via an MVNO agreement with the new T-Mobile.
“Sprint’s shuttering of Virgin Mobile USA potentially aids DISH Network’s plans to start up a new wireless business built in part upon Sprint’s prepaid operations, simply because it won’t have to deal with the negative overhang from the decaying Virgin Mobile brand,” wrote Parker.
Dish, for its part, did not comment directly on Virgin Mobile transferring to Boost, but in an emailed statement reiterated its commitment to the Boost Mobile brand: "DISH plans to aggressively grow the Boost business from day one. Upon close, we are eager to provide existing and future Boost consumers with our award-winning customer service."
Parker indicated that Sprint shuttering Virgin Mobile was expected, noting recent signs foreshadowed the move.
“It has been clear that Boost Mobile is Sprint’s primary focus in the prepaid wireless segment for a while and this move is no surprise,” she wrote. “Virgin Mobile USA became an afterthought in many consumers’ minds and has been a distraction dragging on Sprint’s prepaid results.”
In addition to pulling from Best Buy and Walmart, it also took the Virgin Mobile brand out of Target in 2018 when Sprint ended that relationship.
Sprint Nextel acquired Virgin Mobile in 2009 for $483 million and the Virgin Mobile brand is licensed from the Virgin Group founded by billionaire Sir Richard Branson.
Virgin Mobile in 2017 took a chance and opted to become an iPhone-only carrier targeting higher-value customers, which Parker categorized as “crushing all hopes of revitalization” for the brand.
“By the time this dubious experiment ended in August 2018, Virgin Mobile had alienated its existing Android customers, and the fact that it continued selling Android devices despite its stated iPhone-only strategy confused potential customers, all of which caused irreparable damage to the brand,” wrote Parker.
While it might not be a surprise, the move does contrast to statements made by T-Mobile executives in September 2018 to the FCC that if successfully merged, the New T-Mobile would retain T-Mobile and Sprint’s prepaid bands as they target different types of customers.