Virgin Mobile USA Buys Helio for $39 Million in Equity - Blizzard Sector

**NewsDude** · 06-27-2008, 10:00 PM

Virgin Mobile USA on Friday said it has agreed to acquire Helio, a joint venture between SK Telecom and EarthLink, for $39 million in equity.
Strategically, the Helio acquisition allows Virgin to add a set of data applications to its suite of products and services. Entering into the postpaid market will also give Virgin access to about 140 million prospective new customers.
Dan Schulman, CEO of Virgin Mobile USA, characterized Helio as an asset that adds to the company's scale and allows it to reduce network costs.
"This strategic acquisition integrates Virgin Mobile USA's brand recognition, scale and extensive distribution with Helio's accomplishments in advanced handset and content offerings," Schulman said. "It provides us with a firm foundation to create a truly holistic, leading-edge product suite to service all of our existing and prospective customers."
Virgin Enters the Postpaid Market
With the acquisition, Virgin will gain an established postpaid billing and customer care platform. Virgin expects acquiring Helio's 170,000 customers and expanding its portfolio will increase the company's volume. That, the firm said, will drive down the company's cost per minute under an amendment to its Personal Communications Service agreement with Sprint Nextel.
On the consumer side, Helio has made headway on social networking. The company has developed data services in partnership with YouTube, Google and MySpace. Virgin said it will use this to strengthen its competitive position in the prepaid, hybrid and postpaid markets while moving its handsets upmarket.
"With about 20 percent of our disconnects currently going to postpaid products, we believe this new platform will be a powerful retention tool as we offer a unique and desirable postpaid alternative to our customers," Schulman said.
Is the MVNO Model Failing?
JupiterResearch analyst Michael Gartenberg is somewhat surprised Virgin is buying Helio. The Helio concept was struggling as a high-end Mobile Virtual Network Operator (MVNO) targeting...

More...

Thread Tools
Show Printable Version Email this Page
Display Modes	Rate This Thread
Linear Mode Switch to Hybrid Mode Switch to Threaded Mode	Rate This Thread:

06-27-2008, 10:00 PM	#1 (permalink)
NewsDude Status: *** Elder Join Date: Mar 2008 Location: News Office Posts: 1,884** Tournaments Joined: 0 Tournament Wins: 0 Spent time on board: 0:05:24 Hours Rep Power: 4	Virgin Mobile USA on Friday said it has agreed to acquire Helio, a joint venture between SK Telecom and EarthLink, for $39 million in equity. Strategically, the Helio acquisition allows Virgin to add a set of data applications to its suite of products and services. Entering into the postpaid market will also give Virgin access to about 140 million prospective new customers. Dan Schulman, CEO of Virgin Mobile USA, characterized Helio as an asset that adds to the company's scale and allows it to reduce network costs. "This strategic acquisition integrates Virgin Mobile USA's brand recognition, scale and extensive distribution with Helio's accomplishments in advanced handset and content offerings," Schulman said. "It provides us with a firm foundation to create a truly holistic, leading-edge product suite to service all of our existing and prospective customers." Virgin Enters the Postpaid Market With the acquisition, Virgin will gain an established postpaid billing and customer care platform. Virgin expects acquiring Helio's 170,000 customers and expanding its portfolio will increase the company's volume. That, the firm said, will drive down the company's cost per minute under an amendment to its Personal Communications Service agreement with Sprint Nextel. On the consumer side, Helio has made headway on social networking. The company has developed data services in partnership with YouTube, Google and MySpace. Virgin said it will use this to strengthen its competitive position in the prepaid, hybrid and postpaid markets while moving its handsets upmarket. "With about 20 percent of our disconnects currently going to postpaid products, we believe this new platform will be a powerful retention tool as we offer a unique and desirable postpaid alternative to our customers," Schulman said. Is the MVNO Model Failing? JupiterResearch analyst Michael Gartenberg is somewhat surprised Virgin is buying Helio. The Helio concept was struggling as a high-end Mobile Virtual Network Operator (MVNO) targeting... More...