Sprint Nextel Corp.'s (S) Virgin Mobile is beginning its marketing effort for the pay-as-you-go version of Apple Inc's (AAPL) iPhone, but only for a limited time as Apple has imposed an advertising blackout beginning in about a week, according to a person familiar with the situation.
The device, which the company also recently began selling at Wal-Mart Stores Inc. (WMT) and Target Corp. (TGT), is the first prepaid iPhone from a major wireless carrier, but it hasn't gotten much exposure partly because of Apple's requirement that it approve all marketing plans. With that approval in hand, Sprint is rolling out television ads that will run at peak times and is using print advertising in large publications, including Time Warner Inc.'s (TWX) Sports Illustrated, to try to boost sales.
The TV spots started running Friday and are part of a month-long push from the prepaid carrier. However, the iPhone ads will only run for about a week because Apple is imposing an advertising blackout, the person familiar with the situation said. Apple is widely expected to unveil a new version of the iPhone in early September.
Representatives from both Apple and Sprint declined to comment.
Sprint has declined to break out the performance of its prepaid iPhone sales, but it sold a total of 1.5 million iPhones in the second quarter. Some industry analysts have questioned the willingness of consumers to pay more than $500 up front for the prepaid device, as opposed to getting it heavily subsidized when signing a postpaid contract.
Virgin launched its prepaid iPhone in late June, selling it at RadioShack Corp (RSH), Best Buy Co. (BBY), as well as online and at some local retailers. In late July, it became available at Target and Wal-Mart--one of Virgin's biggest outlets--only began selling it two weeks ago.
While Virgin is pushing the prepaid iPhone for the first time, it is also doing so just before the widely expected unveiling of the next generation of the device next month. Sprint has downplayed any potential conflict because its prepaid brands usually have a lag between when devices are launched to contract customers and when they become available to pay-as-you-go customers.
"This is going to be the most important thing that we push in prepaid," Chief Sales Officer Paget Alves said in an interview earlier this month.
Mr. Alves said the company has been increasing its overall presence at Wal-Mart and Target for its prepaid products. That decision is made by the retailer, he said, and is mostly based on product performance and offerings.
"We are getting a larger portion of the shelf space available to carriers, which is a sign that we are winning in the prepaid space," he said
Last year, Sprint made a $15.5 billion, four-year purchase commitment to Apple in order to carry the phone. The company said recently it is ahead of pace to meet that requirement.
Sprint's pay-as-you-go brands, which include Boost Mobile, have been a source of subscriber growth while its postpaid business has struggled. In the first six months of 2012, Sprint added 630,000 prepay customers and lost 438,000 contract customers.
Sprint shares recently rose 1.7% to $4.86 and Apple rose $2.53 to $665.16.
Write to Thomas Gryta at thomas.gryta@dowjones.com
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