NEW YORK (Reuters) - Virgin Mobile USA has taken inspiration from car makers with a promise to waive three months of cellphone fees for customers who lose their jobs, a move it hopes will attract new business.
The company said on Thursday that new customers of its monthly service plans, including its latest offering -- a $49.99 (34.17 pounds) a month unlimited calling service -- would now be automatically enrolled in its “Pink Slip Protection” program.
Under the program, Virgin will cover monthly bills, including taxes and surcharges, for up to three months for users who have lost their jobs as long as they have been customers for at least two months and are eligible for unemployment benefits.
While automakers such as Hyundai, Ford and General Motors have offered similar assurances to car buyers, this is the first such offer from a U.S. telecom.
“It’s a good idea right now because while the economic situation is bad a lot of Americans are afraid of losing their jobs,” said Roger Entner, Nielsen’s head of telecom research.
The plan poses minimal risk for Virgin, he added.
“If all the people who sign up for this become unemployed, they’re losing money on it, but that’s not going to happen,” he said. “If you’re there more than a year, they’re good.”
Virgin specializes in prepaid services where customers pay for calls in advance rather than in a monthly bill and do not have to commit to a contract. It and rivals such as Leap Wireless and MetroPCS have reported increasing interest in prepaid services as the economy has soured.
Virgin revealed the pink slip protection in conjunction with the launch of a $49.99 monthly unlimited call plan that pitches it directly against competitors such as Leap, MetroPCS and Boost Mobile, a unit of Sprint Nextel Corp that launched a similar calling plan earlier this year.
Virgin said that new rates from part-owner Sprint Nextel, from which it rents network space, allowed it to pass some savings on to customers.
Reporting by Sinead Carew; Editing by Lisa Von Ahn