Google's Pixel 7 Event National Taco Day Microsoft Surface Event Xiaomi 12T Pro's 200MP Camera iPhone 14 Pro Action Mode vs. GoPro Hero 11 TikTok Money Advice Hottest Holiday Toys Gifts for Cyclists
Want CNET to notify you of price drops and the latest stories?
No, thank you

Virgin aims for middle with new payment plan

Carrier that pioneered pay-as-you-go in the U.S. now offers a monthly rate, but says it will stay true to its contract-free roots.

Virgin Mobile USA has made available a new method of paying for cell phone calls that resembles the plans typically offered by its chief rivals, except for one thing: There's still no contract required.

Under the new Virgin option, for $30 a month subscribers get 300 minutes of inbound and outbound calls. If they go over the allotment, another set of minutes is available for an additional $10 a month, Chief Executive Dan Schulman said during a recent interview.

The new plan is being offered in addition to the carrier's other payment options, which allow customers to prepay for calls on a per-minute basis. The older plans lets subscribers add to their monthly minutes at any time.

On the surface, the new payment option seems to be a step closer to the more traditional plans offered by Sprint, a part-owner of Virgin Mobile USA, and other major carriers, which typically require subscribers to sign long-term contracts and pay penalties if they decide to switch to another operator before the contract term is up. Yet Schulman said Virgin Mobile, which is a joint venture between No. 3 U.S. cell phone operator Sprint and Sir Richard Branson's Virgin empire, will stay true to its roots and remain a prepaid service that doesn't require any long-term commitments to the operator.

Since their debut in 2002, prepaid plans, also called contract-less plans, have proved to be the right mix to attract young adults who lack the solid credit history that carriers typically require of subscribers. Teens, in particular, are now a major focus of cell phone operators, as the number of adults with handsets is nearing saturation levels. Nearly every major U.S. operator offers a contract-less plan, including No. 1 operator Cingular Wireless, whose Go Phone is now the subject of a major marketing effort.

Virgin's two older plans are being promoted as appropriate for light and occasional users. One charges 25 cents a minute for the first 10 minutes of any given day, and 10 cents a minute afterward for that day. The other charges 35 cents a day, then 10 cents a minute for the rest of the day.

Schulman says the new Virgin plan, aimed at heavy cell phone users, is a sign of the maturation of the prepaid market in the United States.

"You are seeing the coming of age of pay-as-you-go," Schulman said.