Why is virgin mobile so cheap?

They are selling an iphone 5 for $450 and the plan is $35 a month. How? Why? Every other company is like a $100 month or $70 a month at the lowest. What is it that I'm not getting from virgin that the others are apparently selling? Will the service be horribly unreliable or something? I remember owning a VM phone 7 years ago and had good reception then switched to verizon and had poor reception in the same house. I'm so shocked and confused who is ripping me off the expensive guys or the dirt cheap guys?

Because they don't provide the same levels of customer service, they don't have a store in every mall in America like the "larger" more expensive mobile phone carriers. Virgin mobile also doesn't have that many phone choices which are compatible with their network.

Not all phone carriers have the same coverage, you must check your local coverage maps.

Because you pay full price for the phone upfront.

Their plans don't include subsidies and the have far less overhead. They also don't manage or maintain the network they run on.

Virgin has a deal with Sprint. They run over their network. They're actually owned by them.