UK wireless operator Virgin Mobile has begun selling its own-brand wireless services in the US, a move analysts believe will shake up the US wireless industry.
Virgin has teamed up with the fourth-largest US wireless operator, Sprint PCS, to form Virgin Mobile USA, the first Mobile Virtual Network Operator (MVNO) launched in the US.
Operating as an MVNO means that while Virgin Mobile USA will be responsible for all customer sales and support it will rely on Sprint PCS's wireless network.
It is a business model that Virgin pioneered in the UK, only to see a rash of other retail brands follow with similar offerings. Analysts believe it is a model that should prove equally effective in the US.
"Everything is in place for them to succeed - they just have to execute properly," said Andrew Cole, senior vice president at Adventis.
But the biggest challenge for Virgin will be having to work harder to establish its brand in the US where it is less well known than in the UK, said Cole.
Initial Virgin Mobile sales have begun in just two cities - Sacramento, California and Columbus, Ohio - but the company expects nationwide sales by August.
Virgin is hoping that its brand, its service and its marketing will appeal to an under-30 market, but in particular those between 13 and 24 years old.
It is offering a prepaid-only service with just one pricing plan that charges 25 cents for the first minute and 10 cents for each successive minute.
The venture joins a US wireless market increasingly focused on the same youth market, but Virgin is in a strong position to compete.
"The operation has been built from the ground up to support prepaid services. That has been little more than an afterthought for incumbent operators," said Charles Golvin, senior analyst at Forrester Research.
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