[m419]

Because customers spending £40 on services like that would still generate revenue, termination rates for text message cost less than a penny. If they are able to throw in 300 mins and 300 texts for £10 to pay monthly customers, they can afford it.

A while back there was a programme think it was on Watchdog, and they asked companies why does prepay services such as pay as you go mobiles and prepaid gas and electricity cost so much more than credit options. None of the companies gave a straight forward reason except EDF Energy, there excuse was 'Prepayment meters cost a lot more to maintain', maybe it does, but when it comes to mobiles, there isnt much maintainance.

Furthermore, many phone companies use Internet services such as Voip and sim boxes to reduce cost of termination rates ect...... Virgin are most likely to do this as Virgin Media is the main Cable internet provider but the 3rd if not the 2nd largest Internet provider as a whole in this country.

Mobile World,owned by Carphone warehouse plc who also own Opal Telecom, provide international calls from just 5p per minute, they are able to do this as they are obviously using in-house technology at Opal Telecom to route the calls.

You also mention its not suitable for the occasional user,well it is, those who put on £5 here and there would just pay the standard rates.

You also mention about having enough funds to run such a tariff, well there bank accounts probably pay them interest anyway and didnt they float on the stock exchange before NTL acquired them? They have enough money, they just need to stop wasting the money on poor marketing, I mean there sponsorship advertisements for Big Brother were terrible, no way did it encouage me to join Virgin, also Carphone Warehouse dropped out because of Big Brother's reputation with the racist comments.

A sensible way of advertising that would not cost Virgin Mobile too much money is to use Virgin Media TV channels such as Virgin1 and Trouble, and to send advertisements by mail direct to Virgin Media customers (Depending on if the customer has not opted out for marketing communication)

Sponsoring Channel 4's big brother must be very expensive and believe that they could spend the money more wisely such as looking at how introduce new products and services and to reduce costs.