Virgin Mobile to acquire Helio and dissolve brand
updated 01:20 am EDT, Wed June 25, 2008
Virgin Mobile wants Helios
Last reported in May, Virgin Mobile USA is set to absorb SK Telecom-owned Helio in a deal said to approach the former paying the Korean telecommunications firm almost $50 million, leaving SK holding 20-percent of company holdings. The Financial Times writes that the MVNO will dissolve its identity in favor of the more recognizable Virgin Mobile brand, and integrate its 200,000 users into Virgin's customer base of 5.1 million mobile users.
The move comes in response to both companies experiencing an ailing market: shares of Virgin plummeted 75-percent since first listing in October 2007, while Helio faced challenges growing its network size after launching in 2006.
The combination of the two carriers is expected to be quite profitable for both, in spite of the relatively small size of both carriers when contrasted against the four main US cell providers.
Virgin recently posted its financial information for the first quarter of 2008, posting $4.8 million net income – 75-percent down from the year ago quarter – and expects to lose between 130,000 to 160,000 subscribers.
