Sprint to launch prepaid iPhones on Virgin Mobile by July 1

MarketWatch reports (via MacRumors) that Sprint will launch own prepaid iPhone offering through its Virgin Mobile arm.

The move follows last week’s unconfirmed news that Boost Mobile, another Sprint property, will be getting prepaid iPhones on June 22.

As you know, Cricket became the first carrier in the United States to announce plans to begin offering the iPhone on a prepaid basis in early September…

According to MarketWatch:

The Overland Park, Kan., carrier will announce this week it will offer the popular smartphone on its Virgin Mobile pay-as-you-go brand starting as soon as July 1, according to people familiar with the company’s plans. Sprint follows Leap Wireless International Inc. LEAP in selling the device with prepaid service.

The well-informed Wall Street Journal, which owns MarketWatch, corroborated the report, citing “people familiar with the company’s plans”:

Sprint Nextel Corp. is set to become the second U.S. mobile-phone carrier to offer Apple Inc.’s iPhone on a pay-as-you-go basis.

Sprint, which has been in the prepaid biz through its Virgin Mobile and Boost Mobile properties, added 489,000 prepaying customers in the first quarter amid losing 192,000 contract customers.

Virgin Mobile’s cheapest plan for smartphones costs $35 a month, which buys you unlimited data throttled after 2.5 GB.

Instead of committing your soul to a two-year deal, a prepaid iPhone costs you more from the onset in terms of handset price but you get to chose month-to-month plans to go with it.

You can cancel and reactivate these plans at a moment’s notice, whenever it suits you. Thee phones usually come unlocked so prepaid deals could be of interest to jailbreakers as well.

The biggest advantage of prepaid phones over subsidized smartphones sold with pricey two-year plans is in cost of ownership.

John Brownlee, writing for Cult of Mac, offers a number of compelling reasons why pay-as-you-go Cricket iPhones are all the rage, all boiling down to the following price matrix.

Note that Cricket’s asking price for the hardware ($399/$499 for the 8/16GB iPhone 4 with a $55 per month unlimited plan) is $150 lower compared to no-contract iPhones sold by Apple.

Summing up, Brownlee writes:

The bare minimum most people will save if they go with Cricket for their next iPhone is $520 over the course of the contract. That’s more than the cost of buying the unsubsidized iPhone (in fact, according to the above data, you’ll make back what you originally spent on the unsubsidized iPhone by the end of the first year).

Apple spokeswoman Natalie Harrison provided The Loop with the following comment regarding prepaid iPhones on Cricket:

By making iPhone available on pre-paid plans through Cricket Wireless, we are making the best smartphone more accessible to an even broader market in the US.

Do you care about prepaid iPhones?