In an attempt to dramatically upset the established order of cellphone carriers in the United States, Virgin Mobile has struck a deal with Apple to make consumers an offer that seems too good to be true: one year of unlimited talk, text and data for $1.
Virgin Mobile is using other Virgin brands, such as its hotel chain and airline, to further lure customers into giving its prepaid service a chance. People who sign up with Virgin Mobile will also be added into the “Virgin Inner Circle,” which includes perks like a free one-night stay at a Virgin hotel or a “companion ticket” for flights to the U.K.
Angela Rittgers, chief marketing officer at Virgin Mobile, told Ad Age that its “biggest struggle is how to make sure consumers understand there is no gimmick behind this.”
“As we think about mobile and ultimately what we’re trying to achieve, it’s how do we go about disrupting the wireless industry,” Rittgers said. “Mobile plans are complicated and boring. People look at them like a utility provider. They don’t think about their wireless company until there’s a problem. We want to make them fun and exciting.”
This isn’t the first time a carrier has offered such a deal. Last week, Sprint, the parent company of Virgin Mobile, offered customers who switched to Sprint from Verizon, AT&T or T-Mobile one year of free service if they provided their own device.
There is a slight difference between the two promotions, however.
Virgin Mobile said customers can only qualify if they purchase a new iPhone from either the Apple Store or its website; the cheapest iPhone is about $400 while the most expensive is $970.
As part of its pact with Apple, Virgin Mobile will also no longer sell Android phones moving forward. In the future, Rittgers said it will sell used, Apple-certified iPhones at about $200.
Meanwhile, the company also tapped Droga5 to start a “100% digital-focused campaign” including videos and display ads on platforms like Snapchat, Twitter and major news websites. The spots will include playful vignettes like “Inner Circle Problems,” Ritggers said, and focus on other, fictional “inner circles” like meat smokers.
Verizon is the leading carrier in terms of customers, with about 146 million, followed by AT&T (134 million), T-Mobile (72.6 million) and Sprint (60 million), according to various estimates.
Virgin Mobile has historically struggled to keep up with competitors like T-Mobile’s MetroPCS and AT&T’s Cricket Wireless. Last year, Recode reported that Sprint CEO Marcelo Claure was planning on scaling back Virgin Mobile’s efforts to win customers from rivals.
“You’ve got to figure out where do you want to fight and where do you want to grow,” Claure previously said. “We are keeping the customers that matter.”
Rittgers said the full year of unlimited service for $1 is only for customers who sign up within the first 30 days following the campaign’s introduction on Wednesday. After that it reverts to a six-month offer. Service will cost $50 following the promotional deal. Customers won’t be beholden to any sort of contract.
“We think there is a really large opportunity to come in as a new disruptive carrier with this $1 offer,” Rittgers said. “The way we view it is we consider it the longest test drive someone will ever take.”