Jun 25, 2008 (11:06 AM EDT)
Virgin Mobile Reportedly Ready To Buy Helio
Read the Original Article at InformationWeek
Virgin Mobile USA is set to acquire struggling mobile virtual network operator Helio, according to a report from the The Financial Times.
Under the deal, Helio subscribers would be absorbed under the Virgin Mobile brand. SK Telecom, the majority shareholder of Helio, would receive about $50 million worth of shares. SK Telecom would also invest a "nominal sum" in Virgin Mobile, the report said.
The Financial Times said the deal has already been agreed upon in principle. Representatives from Helio, SK Telecom and Virgin Mobile declined to comment.
The potential deal could allow Virgin Mobile USA to get a toe in the monthly contract market, which is more lucrative than the prepaid one. It could also give Virgin additional negotiating power for the price it pays to lease network capacity from Sprint Nextel.
Established in 2002, Virgin Mobile USA has over 5 million subscribers on prepaid deals. It's primarily aimed at the youth market, with many phones retailing for less than $20. It went public last October, raising about $413 million.
Helio was launched in 2006 by SK Telecom and Earthlink, and it was aimed at users who wanted heavy data access for non-business purposes. Despite critically acclaimed devices like the Ocean, Helio only attracted about 200,000 subscribers.
If the deal goes through, Helio will be the latest mobile virtual network operator to fail in the United States. Last year Amp'd filed for bankruptcy and