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Helio Is Officially Folded Into Virgin Mobile USA


Posted by Eric Zeman, Aug 22, 2008 01:59 PM

Today marked the official end of yet another MVNO. Virgin Mobile USA has closed its acquisition of Helio. Helio made waves as an MVNO, providing innovative handsets and services at good prices. Can Virgin Mobile keep the Helio spirit alive?


Helio was perhaps the best example of what a MVNO could be. It bucked trends followed by other MVNOs and set itself up as a premium service provider. It also bled money like mad. Investors EarthLink and SK Telecom dumped hundreds of millions into the joint venture. As of today, Helio has just 170,000 subscribers, and now they all belong to Virgin Mobile USA.

It's not clear what the future holds for Helio subscribers, but Virgin Mobile USA subscribers should see some improvements. Virgin Mobile will be able to offer Helio's innovative handsets, such as the Ocean, to its subscribers, and will also be able to add Helio's data services, such as Buddy Beacon.

Most importantly, it will allow Virgin Mobile to switch from providing just prepaid services to postpaid services, which are more lucrative. Dan Schulman, CEO of Virgin Mobile USA, said in a prepared statement, "Adding Helio's differentiated postpaid offer to Virgin Mobile USA's existing portfolio will expand both our market opportunity and our ability to deliver new products and services more rapidly. We believe this transformative transaction will bolster our leading position in the wireless space, and enable us to provide customers with whatever they need in wireless, always with our focus on great value, flexibility and customer service. We look forward to revealing our roadmap for expanded, innovative offers in the near future."

Helio was put through the ringer a bit in order to make the deal work. Virgin Mobile forced Helio to get rid of its debt. Helio also closed nearly all of is retail outlets, save for one in NYC.

Helio's previous owners, EarthLink and SK Telecom, will still retain a stake in the venture via stock in Virgin Mobile USA. SK Telecom also will add two of its own to Virgin's board of directors.

The last 15 months has been a turbulent time for MVNOs. Hopefully this acquisition will give Virgin Mobile the strength and resources it needs to survive in a competitive wireless landscape.

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