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Faced with droves of subscribers dropping their Sprint service, the mobile phone service provider has found a way to keep a number of consumers connected to its network.
Sprint is upping the commission fees it pays to Virgin Mobile for each subscriber signed to use the Sprint network.
According to Sprint Nextel documents recently filed with the Securities and Exchange Commission, Sprint agreed to pay Virgin Mobile $4.50 per subscriber signed onto the Sprint network between July 1, 2008 and the end of 2009. Previously, Sprint paid Virgin Mobile $2.50 for each customer signed.
Sprint's business of providing networking facilities to Virgin Mobile has been a lucrative venture for Sprint during the period it has been working to gain new traction after its disastrous $35 billion acquisition of Nextel, which has cost the company millions of lost subscribers. Sprint has concentrated in recent months on stabilizing the Nextel iDen network and on deploying a mobile WiMax network through its partnership with Clearwire.
Sprint's deal with Virgin Mobile became more attractive after the mobile virtual network operator acquired Helio -- and Helio's generally youthful user base -- earlier this year.
Virgin Mobile has partnered with Sprint for years, with Sprint supplying network infrastructure for Virgin's 5 million-plus subscribers. Virgin Mobile is expected to pay Sprint some $320 million in infrastructure fees in 2008, with the amount expected to rise in the next year or two at least.
At latest count, Sprint had slightly more than 50 million subscribers -- enough to be the third-largest cell phone service provider behind AT&T and Verizon Wireless.