Virgin Mobile Heats Up Prepaid Mobile Broadband Wars

In a bid to grab new customers, Sprint’s (s s) Virgin Mobile USA has reduced the price of its highest capacity prepaid unlimited mobile broadband service to $40 per month with no contract. That compares favorably to Verizon’s (s vz) new prepaid plan at twice the price with a 5 GB limit over 30 days. Along with the price reduction, Virgin Mobile USA is retaining its $10 plan that provides 100 MB of mobile data over the course of 10 days.

Sprint’s main CDMA competitor, Verizon, has offered prepaid mobile data since November of last year, but the pricing is much higher than that of postpaid plans as the carrier would rather lock consumers into a two-year contract. Verizon, too, just modified its prepaid mobile data plans today, with the smallest plan boosted to 100 MB. You’ll need to use it up quickly however, because for $15, it only lasts for a day. And when Fierce Wireless caught wind of a potential new 5 GB plan last night, I confirmed it on the Verizon site today: The new prepaid plan currently costs $80 for a month of data, or double the new Virgin Mobile USA offering.

Compared to the $60 per month that I currently pay Verizon Wireless for service on my MiFi, the new Virgin Mobile USA plans are a steal. The benefit that may entice other consumers is the lack of a contract; while you have to purchase a $150 MiFi or $80 data stick up front from Virgin Mobile USA, you don’t have to pay for data when you don’t need it. Luckily, I’m long past my contract date and on a month-to-month plan, so I don’t have to fear a hefty early-termination fee.

Aside from consumers winning with a another cheap mobile broadband choice, Sprint has much to gain through the cheaper Virgin Mobile USA mobile broadband plan if it attracts customers. The carrier purchased Virgin Mobile USA in July of 2009 for $483 million, and the prepaid brand has brought Sprint needed cash as both its ARPU and number of subscribers have been declining. In the most recent quarter, Sprint did grow its subscriber base for the first time in three years, but still reported a net loss of $760 million.

Related research on GigaOM Pro (sub. req’d):

What Happens When Data-Friendly Phones Come To Prepaid?