Virgin Mobile’s iPhone-only plan: What's the catch?

Corrections & Clarifications: An earlier version gave the incorrect price of the plan if you transfer from another carrier by July 31. 

Q. The new Virgin Mobile iPhone deal looks incredibly cheap. What’s the catch?

A. This Sprint-owned prepaid wireless service has once again rewritten its price plans. And where previous Virgin Mobile USA offerings came with extra complexity—an option to buy data access only for specific apps one year, a shared-data feature confined to particular phone models the next—this one seems much simpler.

Its new “Inner Circle” plan, announced last month, doesn’t require any Android-or-iOS contemplation, because it’s iPhone-only. Nor do you have to bother calculating what different plans would cost, since there’s only one: $50 a month with auto-pay for unmetered data, calling and messaging.

And if you transfer a number from another carrier or upgrade an existing Virgin Mobile account by July 31, you pay only $1 for service over the next 12 months. Sign-ups afterwards only get that $1 price for the first six months.

So how can this Sprint subsidiary beat its corporate parent’s prices? By leaving out some things.

One is a choice of purchase options. You have to buy an iPhone—from the compact SE to the top-of-the-line 7s Plus—either at Virgin Mobile’s site or in one of Apple’s stores. You can’t bring one from another carrier or find a discount at third-party resellers.

Another is unrestricted use of data sold as “unlimited.” To begin, you can’t share that bandwidth via Wi-Fi with nearby devices unless you pay $10 a month extra for a mobile-hotspot option that adds 10 gigabytes of “tethering.”

You also can’t watch streaming video in high definition on Sprint’s network, since the service automatically compresses it to DVD-grade resolution. And it limits streaming music to 500 kilobits per second and streaming gaming to 2 Mbps, though both should be less onerous limits.

Sprint’s own unlimited-data offering, $50 a month with auto-pay through next June and then $60 a month, doesn’t impose those hotspot and streaming restrictions.

With Inner Circle, you also have to be careful to stay on Sprint’s network—you only get 100 megabytes of roaming data a month. Unfortunately, if you enable data roaming to ensure you stay connected in areas where Sprint’s recently-improved network still lags, Virgin Mobile doesn’t let you monitor that off-network usage as it happens.

Finally, you have no international-roaming options at all. That need not turn your Virgin Mobile-purchased phone into a WiFi-only device in other countries if you call and ask for a free unlocking before you depart.

From then on—or if you buy the iPhone from Apple, in which case it comes unlocked—you can buy cheap prepaid SIM (Subscriber Identity Module) cards for coverage overseas. Your normal number won’t work, but you’ll have local data coverage at competitive speeds and the ability to talk to friends back home using apps like Apple’s FaceTime or Facebook’s Messenger.

Should those limits work for you, Inner Circle offers an extra incentive in the form of discounts at such other Virgin-named firms as the airlines Virgin Atlantic and Virgin America (plus the latter’s new parent Alaska Airlines) and the new Virgin Hotels, now expanding past its sole Chicago location. But here, too, there’s a rule: You need to sign up for Virgin Mobile’s service by Sept. 30.

Rob Pegorarois a tech writer based out of Washington, D.C. To submit a tech question, e-mail Rob at rob@robpegoraro.com. Follow him on Twitter attwitter.com/robpegoraro.