Cellular Network's Naked Truth

Surrounded by clouds of confetti and nearly naked men wearing cell phones over their nether regions, Virgin Group chairman Sir Richard Branson descended from a crane over the Virgin Megastore in New York's Times Square last week, tearing off his clothes to reveal a muscled bodysuit and cell-phone-equipped undershorts. The stunt, characteristic of the flamboyant Branson, served to promote the launch of Virgin Mobile USA, a national cellular network with the motto: "We've got nothing to hide."

The service, a joint venture between Virgin and Sprint PCS, will target consumers between 18 and 24 years old. Service will be available solely on a prepaid basis and won't distinguish between peak and off-peak usage. Customers will pay 25 cents a minute for the first 10 minutes of a day and 10 cents a minute after that, with no extra charges for long distance or roaming.

Virgin also revealed a partnership with MTV Networks, which will provide content. Extra-fee services (paid through the deduction of prepaid calling time) include the ability to listen to new music, download ring tones that play current hits, and receive text messages of music news. "We want to be everywhere our audience is, and today young people are embracing a wireless world," says Tom Freston, CEO of MTV Networks.

Virgin Mobile is the first U.S. mobile virtual network operator, meaning it hasn't installed a bit of hardware and will operate entirely on Sprint's network. Virgin will handle branding, customer service, billing, and marketing and has helped design the phones, available now at Best Buy, Circuit City, and Target.

While Virgin Mobile is the first virtual operator, it might also be the last to launch for some time. The U.S. cellular market is too saturated, In-Stat analyst Ken Hyers says. There's not likely to be room for providers aimed at other markets, particularly business users. "You've got to target a very specific market segment," he says. "And business is already the core market for national carriers."

Photo of Sir Richard Branson courtesy of Lawrence Lucier/Getty Images.