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Virgin shakes up mobile market with One2One deal

Claims to offer simplified tariff structure

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Virgin is promising to cut mobile phone bills by a third with the launch of non-contract phones from Virgin Mobile. Speaking at today's launch in London, Richard Branson said the company would offer a simple, one-tariff system without contracts. This applies to pay-as-you-go and billed customers. Virgin Mobile, a joint venture between the Virgin Group and One2One was announced in August as the ultimate antidote to rip-off Britain. "Does anyone realise how big a scam is out there?" Virgin chairman Branson asked. "Mobiles are now a way of life, but despite this, what's on offer is not very good. However you look at it, mobile phone users have been bamboozled and short changed." He spoke of a "confusing" range of offers and tariffs, adding that if everyone in the UK with a mobile switched to Virgin, they would save a combined £1.6 billion per year. Starting from tomorrow, Virgin Mobile will have one tariff. Calls will be priced per day -- the first ten minutes will cost 15 pence per minute, the next ten will be ten pence per minute, and the rest of the day is charged at five pence per minute. This excludes calls to other mobile networks, which will have a flat rate of 35 pence per minute. Customers will pay £12.50 for a one-off service pack, which includes a SIM card, phone number and £10 of free airtime. They will also buy their own phone, choosing from a range of seven models priced between £69.99 and £379.99. Optional extras will allow users to receive special offers on Virgin flights, travel information and email services. Virgin Mobile will sell the service through its 310 Virgin and Our Price music stores. It will also sell direct through its call centre and over the Web. Tom Alexander, Virgin Mobile MD, said: "The wireless multimedia is crying out for clarity and a fresh approach." Today's 50:50 venture with One2One will "shake it up a bit", according to Alexander. Virgin is spending £20 million on the advertising campaign, and expects to have invested around £50 million before seeing a return in the company's second year. It expects to sell one million phones in the next 15 months, with 300,000 of those moving over the Christmas period. Alexander said the company would be looking at WAP technology, but would not be bidding for one of the upcoming UMTS licences. On his choice of One2One, Branson said the company was "braver" than the other networks, and would let Virgin Mobile compete direct in the market. He dismissed claims that the operator had problems with its network capacity, saying the company was currently spending £2 million per day to improve its infrastructure. ®

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