RealTime IT News

Sprint Not Worried About Joint Venture

Sprint Corp. and the United Kingdom-based Virgin Group are each ponying up $150 million to fund a joint-venture wireless phone company marketing the highly sought under-30 demographic.

Virgin Mobile USA will be available nationwide sometime in mid-2002, officials said.

The announcement, made Friday, is desirable for Virgin -- with its many "old" media holdings in the music and publishing industries -- and gives them a division to sell mobile wireless phones branded to its name.

For Sprint, the benefits of a joint venture are not as obvious. At first blush, it even seems the deal bites the hand that feeds it, since the carrier already has a mobile phone division of its own, Sprint PCS.

"We think the market is large enough that the two (Sprint PCS and Virgin Mobile USA) won't present any conflicts," said Sprint spokesperson Dan Wilinski.

Also, much of its $150 million investment comes in the form of services -- not cash -- so its actual capital risk is minimal.

Sprint PCS President Charles Levine sees Virgins marketing muscle allowing Sprint to capture even more under-30 customers than the company could under its own label.

"Sprint is committed to clearly and efficiently penetrating the under-30 pay-as-you-go market in the U.S.", he said. "This venture allows us to better leverage the operational expertise and industry knowledge both parties bring to this arrangement.

The wireless phone carrier is available in more than 4,000 cities and communities throughout the U.S.