Sprint (NYSE: FON – News, PCS – News) and the Virgin Group today announced a plan for funding the joint venture which formed Virgin Mobile USA, a national wireless service provider. Under terms of the agreement, Sprint and Virgin will have an equal interest in and mutual governance roles of Virgin Mobile USA. Subject to various criteria, Sprint will fund up to $150 million, of which the majority will be in the form of services and the remainder in cash, and Virgin will fund up to $150 million in cash.
“Sprint is committed to clearly and efficiently penetrating the under-30 pay-as-you-go market in the U.S.”, said Charles E. Levine, president of Sprint’s PCS division. “This venture allows us to better leverage the operational expertise and industry knowledge both parties bring to this arrangement.”
“I am delighted that we have finalized the funding plan for this exciting new business,” said Sir Richard Branson, chairman of the Virgin Group. “We believe we can significantly impact the relatively young and growing wireless telecom market in the United States with a unique value for money product offer.”
Virgin Mobile USA’s wireless products and services are scheduled to launch in mid-2002.