Virgin Mobile sells calls at 5 cents

Jul 15th 2010 at 5:00PM

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Virgin Mobile has launched another prepaid cell phone plan, selling minutes for 5 cents each under its payLo plan.
The plan, unveiled Thursday, is the lowest price I've seen for a prepaid phone, and beats what Boost Mobile, Assurance Wireless, Net10 and others sell for 10 cents a minute, including plans for people below the poverty rate. Common Cents Mobile has tried to stand out from the prepaid phone crowd by rounding down calls and charging 7 cents a minute.
The 400-minute payLo plan is $20 a month, which equates to 5 cents a minute. Additional minutes are 20 cents each, a text message is 15 cents, the picture rate is 25 cents, and data is $1.50 per megabyte. Minutes do not rollover.
If you talk less than 400 minutes a month, Virgin Mobile has another prepaid plan that is $7 per month by adding $20 to an active prepaid account for 90 days of service. But the basic rate of 20 cents a minute applies to that plan, giving callers 100 minutes of airtime for three months, or 33 minutes per month. The basic rate plan is for people who want an emergency or safety phone to call if their car breaks down, for example.
The 400-minute plan is a deal if you're using the 400 minutes, since they don't rollover.
"We can't do 5 cents and have them last a lot longer," said Neil Lindsay, chief marketing officer for Sprint Mobile's prepaid plans. "It just wouldn't make business sense."
Before switching to a prepaid phone plan, or any phone plan, check out the coverage and go to a price comparison site to see if the minutes you expect to use are worth the money.
Without long-term contracts, prepaid phones are becoming more popular. The worst disadvantage, however, is that while per minute costs have come down, they're still higher than traditional postpaid service, according to a wireless plan buying guide. Also, the minutes usually expire in one to three months, and you'll have to buy more minutes before they expire. Some, such as Net10, which I have, allow minutes to rollover.

Aaron Crowe is a freelance journalist in the San Francisco Bay Area.
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