With Helio burning through cash like it’s going out of style, the youth-targeted MVNO could really use a helping hand. And, what better way to position yourself as the premier MVNO in the US than to buy up your closest rival.
Reports are circulating that SK Telecom, Helio’s only remaining parent company, and Virgin Mobile USA are negotiating a merger deal that would increase SK Telecom’s US-holdings and give their US market aspirations a renewed push. If SK Telecom ends up acquiring Virgin Mobile USA, Helio and Virgin Mobile USA could be merged into a single MVNO. Both providers lease network time from Sprint, so the handsets and network technologies used between both Helio and Virgin Mobile USA will be compatible.
Private equity investments and strategic investment opportunities are also being considered by both companies. But, if SK Telecom does indeed buy Virgin Mobile USA, we could see SKT giving Virgin Mobile USA a cash boost and then turning around and having VMUSA buy-out Helio in a stock-swap.
This is what CEO Dan Schulman told MocoNews on the subject:
We don’t comment on any rumors out there, but we have said that we believe that there are opportunities for us in terms of non-organic growth, such as another MVNO, or capability set that we might be able to avail ourselves of…Certainly there are a lot of opportunities that we see, and we think some of them are intriguing for us, but it’s a matter of what makes the most sense.
Virgin Mobile USA is an MVNO that we actually respect and like, and it would be good to see them get a heaping cash infusion and gobble up Helio.