Starting this week, a new company now offers free cell phones to low-income South Carolinians. Assurance Wireless, a division of VirginMobile and Sprint, is providing the cell phones and 250 prepaid monthly minutes for those who meet certain criteria.
The phones would be available to those receiving either Medicaid, food stamps, or Temporary Assistance to Needy Families benefits. About 220,000 South Carolinians are currently unemployed. Eleven percent of the state population lives under the poverty line.
The company said the phones are covered by the federal Universal Service Fund, which pays companies $10 per subscriber per month– close to the average per-minute rate spent by paying wireless customers.
Historically, phone providers paid into the fund to help lower-income Americans with landline phones. However, Assurance spokesman Charles Murphy said some companies like Assurance are now using it to cover cell phones, as well.
The payphone is pretty much obsolete. We know people need to have jobs and… to get a job, you need a phone. That’s one reason that we’re doing this, to help people who have problems paying some other bills.
Besides receiving federal subsidies, Sprint realizes the potential for the niche market of prepaid minutes. One study by the financial services group Nomura Securities estimates 60 percent of Sprint’s new prepaid subscribers are through Assurance– which only offers the free plans.
South Carolina is one of about 20 states Assurance now covers. Anyone who wishes to enroll in the program can call (800) 395-2171. There are operators who speak both English and Spanish.