Virgin Mobile Canada is looking to upgrade the quality of mobile devices it can offer customers by introducing monthly payment plans and service contracts in early 2008.

Virgin, which began operations in Canada 2½ years ago, has amassed 500,000 customers through its prepaid plans, where a subscriber purchases calling minutes in advance. When the customer uses up those minutes, they purchase more.

Virgin Group chairman Sir Richard Branson announced Monday that the phone provider would be introducing a subscriber service.
(CBC)

With prepaid plans, the customer must also often buy a handset up front, which can cost hundreds of dollars.

Prepaid plans are popular in other parts of the world, but are not widespread in North America. In Canada and the United States, the majority of customers — 78 per cent of Canada's 19 million subscribers, according to Virgin — are on monthly payment service contracts.

Cellphone companies here subsidize handsets, often giving them to the customer for free in exchange for the subscriber signing on to a two- or a three-year contract.

Virgin is introducing post-paid, or subscriber, plans so it can offer customers more expensive phones and devices that they would otherwise be unwilling to pay for up front.

Virgin Group chairman Sir Richard Branson made the announcement Monday at a press conference in Toronto along with magician Criss Angel. The duo performed a magic trick that had audience members give random details of a phone call, which Angel then made appear on a piece of paper that had been in a locked box suspended above the stage.

Branson would not elaborate on the plan details, but said they would take the "con out of contract" by being simpler than Virgin's competitors.

Angel said he became interested in cellphones when he discovered his own contract in the United States was overly complicated.

"I didn't realize there was a lot of smoke and mirrors there," he said. "That’s something I know about."

Virgin Mobile Canada is half owned by Bell Canada Inc., which counts 100 per cent of Virgin subscribers and 50 per cent of its revenue as part of its own figures.

Virgin said on Monday it had added 100,000 new customers since early March. Bell last week announced it had added 137,000 new customers in its third quarter, or about 200,000 since March. Bell’s main rivals, Rogers Communications Inc. and Telus Corp., added about 400,000 and 270,000 customers in that same time frame.