Sprint Acquires Virgin Mobile - What are Sprint's strategic prepaid wireless options?Sprint acquires Virgin Mobile USA and shakes up the future of their prepaid wireless strategy! If you haven't already, you can review more details about this acquisition by visiting the Sprint Buys Virgin Mobile page. The strategic options that follow are some that come immediately to mind. If you have any others in mind, or if you have any comments related to the topic of Sprint Acquires Virgin Mobile, please submit your feedback (click here to skip there now); myself, and other visitors to the site would love to hear what you think!1. Keep Boost and Virgin operating completely independently This is the "do nothing" scenario. In other words, Sprint acquires Virgin Mobile and continues with the existing brands and their respective roadmaps. If you believe what the Sprint executives and analyst are saying, the brands appeal to completely different demographics (i.e. age, income, race, etc.), with minimal overlap, then this strategy could make sense, and simply allow Sprint to eliminate a massive competitor. I personally do not believe what they're saying. While the two brands do currently target different demographics, there's so much overlap in practice that leaving things as is would be inefficient. In addition, Boost has spent millions trying to broaden its appeal from urban to more middle America (i.e. where Virgin is!) with its Unwronged campaign and Danica Patrick partnership. Conclusion - Although things will remain this way for at least a year following the close of the deal, I can almost guarantee that this will not be Sprint's go forward strategy. 2. Virgin as the CDMA play & Boost as the iDEN play Boost has been whiplashed from network to network over a number of years. They started out on the Nextel iDEN network where most of their growth came from. Then we saw them move to CDMA with the launch of their first monthly unlimited planned dubbed UNLTD - Unlimited by Boost (in 2007?). However, just as that seemed to be taking off, they discontinued the program. Then, shortly after Sprint brought on its new CEO, Dan Hesse, we saw Boost launch its now famous $50 Monthly Unlimited plan. With all of the problems Boost had with the iDEN network (do you recall the text message delay issue?), will they move back to CDMA to gain capacity and access to better technology?....Only time will tell! If I were running Boost, I'm thinking that iDEN is a dead end technology with a weak handset lineup, and no highspeed data, and no technology roadmap to get there...yikes! That said, Sprint could choose to keep Boost on iDEN and continue with Virgin as its CDMA play. This could be a good approach to really help with targeting different users with different features (ex. high speed data versus walkie-talkie) and minimize overlap. However, this approach would almost certainly foreshadow the demise of Boost because eventually iDEN will need to disappear as it has no relevance in the future of wireless technology. i.e. Boost needs to move to a different, non-iDEN technology or die! Harsh but true (in my opinion). Conclusion - This would only occur if Sprint acquires Virgin Mobile and decides that the Boost brand will ultimately be phased out once iDEN becomes truly uncompetitive. I don't foresee this to be the short term decision, but the long term may prove out to look something like this unless Boost expands its CDMA offering soon. 3. Focus Virgin on PAYG & Boost on Monthly plans If you recall, in 2008 Boost saw severe declines in its business, and analysts were predicting some pretty hard times ahead for the carrier/brand. However, when they launched their $50 Monthly Unlimited plan in early 2009, all of a sudden they became the industry's super star and favorite topic of conversation. Meanwhile, Virgin was continuing to bleed customers and market share, and after going public it became known that in fact they hadn't been making a profit for a long time, if ever! So, perhaps a reasonable strategy would be to focus Boost on Monthly plans, while keep Virgin on PAYG, while also trying to grow its Prepaid Broadband presence. This would certainly help to eliminate any competition for customers between the two brands. However, Sprint would want an easy and seamless way to move customers back and forth as their usage needs change. This would prove to be expensive from a platform development perspective, not to mention technologically impractical and unappealing given that customers would need to buy a new handset when they switch between the brands. More than likely, this would require that Boost offer their monthly service on CDMA, which, in my opinion is the only play that keeps Boost surviving. Conclusion - This is a reasonable approach, but unlikely to be the go forward strategy. 4. Dissolve Virgin into Boost This strategy would basically mean that Sprint acquires Virgin Mobile and eliminates the Virgin brand over time, and continue with Boost as Sprint's prepaid brand. This is arguably logical given that Boost is doing well, while Virgin is not. However, given Sprint's investment in the Virgin brand, and my belief that Virgin's brand is much stronger, with a far wider appeal than the Boost brand, I think this approach is borderline silly. I include it here only for completeness ;-). Conclusion - Never going to happen! Click Next below to see the remaining options in reaction to Sprint Acquires Virgin Mobile:
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