Not completely unexpected, Virgin Mobile USA (NYSE: VM) has today announced that it will indeed be taking over Helio. The MVNO joint-venture between SK Telecom (NYSE: SKM) and Earthlink has struggled to find even a modicum of success in a competitive and cut-throat US wireless market.

And, it seems that Helio’s financial troubles have finally come to a head with Virgin Mobile USA making a move to acquire the post-paid MVNO for 13 million shares of Virgin Mobile USA class A common stock, valued at $39 million. The deal is expected to be finalized in Q3 2008, pending regulatory approval. “We believe that the acquisition of Helio and the related strategic investments by SK Telecom and Virgin Group are of enormous benefit to our business, both financially and strategically,” according to Dan Schulman, Chief Executive Officer, Virgin Mobile USA. “We will acquire an asset which will add to our scale, allowing us to reduce our network costs and assure that Helio’s customers are immediately profitable when brought on to our cost structure.”

But, with Helio already in such a bad way, Virgin Mobile USA will have to invest considerably more than 13 million of its shares. The deal will include a $50 million strategic investment by Virgin Group (one of Virgin Mobile’s parent companies) and SK Telecom (the majority stake-holder in Helio) – $25 million from each. Virgin Mobile USA will also be acquiring Helio’s stock of 85,000 mobile phones units, worth $17 million.
While not a tremendous success, Helio has made a name for itself as a post-paid wireless carrier offering unique services and handsets with appealing features – areas in which Virgin Mobile USA has been sorely lacking. The acquisition will not only net Virgin Mobile USA all of Helio’s customer-base, but will also bring in the almost-defunct MVNO’s experience in the post-paid market. Helio reportedly boasts ARPU (average revenue per user) of $80, and Virgin Mobile USA is looking to immediately capitalize on that profitability.

Schulman added, “This strategic acquisition integrates Virgin Mobile USA’s brand recognition, scale and extensive distribution with Helio’s accomplishments in advanced handset and content offerings.”

The acquisition will help increase Virgin Mobile USA’s wireless footprint in the US, while also allowing them to renegotiate network-lease terms with Sprint (NYSE: S) – effectively lowering their per-minute costs by 8 percent. The combination of Helio and Virgin Mobile allows for an improved capital structure by increasing liquidity and paying down debt. But, more importantly for the consumer, the deal means that customers will see better handsets and services rolled out across Virgin Mobile’s subscriber-base. Users can expect to see EVDO data connectivity, GPS, Google Maps, YouTube, and MySpace applications integrated in to their mobile phones.

All in all, the rumored deal should bring more business for Virgin Mobile USA and help to boost their once fledgling stock options. For Helio, the deal represents a dignified alternative to a stage-left exit from a harsh wireless environment.

At least this MVNO didn’t go bankrupt.

Note: The deal between Helio and Virgin Mobile USA does not alter the TOS for Helio customers. Virgin Mobile USA has confirmed that customers wishing to terminate their Helio contracts will be subject to ETF fees. Emails have been sent to Helio customers.

While no official announcement has yet been made, the Financial Times is reporting that a source close to the situation has indicated that a tentative agreement has been struck between Virgin Mobile USA and Helio. The deal would have Helio essentially being absorbed within Virgin Mobile USA’s larger wireless network.

Virgin Mobile USA and Helio have been struggling to make a larger impression in the US wireless market. Since going public last year, Virgin Mobile has seen it’s shares drop over 75% – once worth upwards of $15, Virgin Mobile USA’s stock is now trading at record lows. With financials shrouded in scandal, the joint venture between Sprint (NYSE: S) and Virgin Group lays claim to over 5 million wireless subscribers, firmly placing Virgin Mobile USA ahead of Helio’s fledgling network.

Helio’s subscriber-counts were hovering around 200,000 this past January, and the company has been struggling to find profit in a tough wireless landscape. Burning cash infused from parent companies SK Telecom (NYSE: SKM) and Earthlink, Helio’s been spending without a care in the world. SK Telecom recently took control over Helio with an over the top cash infusion that netted SK Telecom a majority stake in the joint venture. Unfortunately, as these situations usually go, Helio has failed to reach the light at the end of the tunnel.

The two companies kicked off negotiations regarding a possible merger/buy-out just last month, and now it seems there will indeed be a deal. SK Telecom will reportedly be absorbing Helio’s entire outfit in to Virgin Mobile USA’s more recognizable brand. The move makes sense in light of Helio’s plan to close most of its retail stores throughout the nation.

Having only boasted 200,000 subscribers, Helio’s main contribution to Virgin Mobile’s US operations won’t be the addition of subscribers, but rather their experience in the more lucrative post-paid wireless market.

Virgin Mobile USA is said to be prepared to issue payment in the form of equity shares in the larger Virgin Mobile USA. SK Telecom will reportedly secure about a 20% stake in Virgin Mobile USA, worth about $50 million. With luck the consolidation of the two US MVNOs will help boost Virgin Mobile USA high enough to really start flying in the US wireless market. But, with increased pressure from industry incumbents like Sprint, Verizon (NYSE: VZ), AT&T (NYSE: T), and T-Mobile (NYSE: DT), Virgin Mobile is going to have a long road ahead of them.

Helio won’t be known as the last true MVNO to be kicked out of the US wireless market – they’ll be bowing out with at least a modicum of grace.

The Helio Ocean 2 is proving to be more successful than its carrier ever was. With the last true MVNO making its final push in the US wireless market, the Helio Ocean 2 has come to the forefront as the hottest Helio handset ever.

Last we saw, the Helio Ocean 2 was caught on video, which was promptly removed. This time around, we’re seeing the Helio Ocean 2 getting some screen-time by way of the blurriest video we’ve seen in a while.

Of course, any kind video of the Helio Ocean 2 is better than having no video, so that leaves us with these grainy vids of the Helio Ocean 2 getting some hands-on time with some seriously “enthused” South Koreans – SK Telecom (NYSE: SKM) employees, perhaps?
It looks like these videos were recorded using the Helio Ocean 2. Did these “testers” record video and upload them to YouTube on purpose or by accident?
Will this be the closest anyone ever gets to a Helio Ocean 2 in the US? We really have no idea, but if we had to bet… we’d put all our money on “two pair” – we’re not gamblers.
[Via: HelioCity]

Thanks, jin!

With Helio downsizing its operations, possibly in preparation for a takeover from Virgin Mobile USA (NYSE: VM), there are probably mobs (in the loosest sense of the term) of Helio customers worried that they may never get to lay hands on the Helio Ocean’s smarter, better, faster, stronger successor, the Helio Ocean 2.

Alas, their worries might not be misplaced. Helio could very well follow the path of all those other MVNOs that just couldn’t manage to turn a profit. Does that mean the Helio Ocean 2 has to go down with the ship? Well, actually, it probably does.

But, at least we’ve got some in-the-wild footage of the Helio Ocean 2 for all you Helio fans to drool over. This here Helio Ocean 2 was caught on film and posted to YouTube. Cosmetically, the Helio Ocean 2 bears an expectedly striking resemblance to its forebear, but with all those requisite spec-bumps contained within, the Helio Ocean 2 is most definitely smarter, better, faster and stronger than the Helio Ocean.

Unfortunately, the video has been taken down, but at least we have this image of the Helio Ocean 2.

Now, we wait to see if Helio can hold out long enough to actually launch this handset.

[Via: HelioCity]

With SK Telecom (NYSE: SKM)’s Helio MVNO talking to Virgin Mobile over possible merger or buy-out deals, it seems an odd move to actually shutdown much of Helio’s operations throughout the US.

But, we’re hearing that the negotiations between Helio and Virgin Mobile aren’t exactly making waves. Add to that the rumor that Virgin Mobile is planning to back out from the deal altogether unless Helio declares bankruptcy or liquidates their assets in a big way, and the recent move to shutter the doors to many retail stores starts to make sense.

Helio seems to be dead in the water from a financial stand-point, and unless they can work out some sort of deal with Virgin Mobile (which these store closures may or may not affect), SK Telecom’s huge investment in the US market is looking like a huge mistake.

If Helio does indeed go belly-up and isn’t absorbed by Virgin Mobile, we’ll see the last true MVNO finally folding its cards.

[Via: Gizmodo]

Helio’s recent price-drop on the Helio Ocean was rumored to be paving the way for the first new handset from the MVNO in quite some time – the Helio Ocean 2. And, seeing as how Helio passed their “OZ2” through the FCC’s testing labs, the Helio Ocean 2’s launch was all but expected in the near-term.

Unfortunately for Helio customers, the final details on the Helio Ocean 2 are still getting hashed out in the company’s R&D labs. But, thanks to a little birdy with loose lips (beak?), we’ve got some juicy specs that could very well make it in to the production version of the Ocean 2.

It seems that Virgin Mobile negotiations aren’t the only thing that Helio is keeping themselves busy with. We’re hearing that the next-generation Helio Ocean will sport a 3 megapixel camera, 30 fps video recording, 1 GB storage, microSDHC card slot for memory expansion, touch-sensitive directional pad, Flash support, and PC sync support – all in the familiar dual-sliding form-factor that made the Helio Ocean such a pleasure to use.

We’ll keep our ears to the grapevine for more information on the Helio Ocean 2. And, while you’re waiting, enjoy the barely visible picture of the Helio Ocean 2. Stay tuned.

[Via: Engadget Mobile]

Helio has dropped Ocean’s price to just $99. It’s not the “refreshed” version, but it does require mail-in rebate. Still, it’s a bargain especially if you’re already using Helio’s services and send text messages like all the time. Or perhaps enjoy surfing the Web with Opera Mini and/or watching YouTube. If that’s the case, Ocean is the right device for you.

On the other, Helio may be gearing toward launching the all new Ocean 2, which we saw passing the FCC hurdle in March of this year. We’ve no insider information about Helio’s plans, but we know one thing – 100 bucks won’t buy you much more. Here’s the link with more information.

[Via: Engadget Mobile]

Just yesterday SK Telecom (NYSE: SKM) made an official announcement claiming that rumors regarding a possible merger between Virgin Mobile USA (NYSE: VM) and Helio were “groundless.” Today, however, is another story altogether.

Turns out the two companies, Virgin Mobile USA and SK Telecom, are actually in early talks to hash out possible strategic partnerships. One scenario has SK Telecom buying Virgin Mobile USA and injecting it with a big enough cash infusion to actually buy Helio. Whether these preliminary negotiations will lead to an eventual buy-out of Virgin Mobile USA, resulting in a stronger MVNO presence from SK Telecom, remains to be seen. Virgin Mobile USA is keeping mum on the issue until any solid agreement is reached.

Helio would do well to get in good with Virgin Mobile USA’s huge US MVNO footprint. And, the deal would give SK Telecom a serious presence in the US.

[Via: MocoNews]

Following market speculation that SK Telecom (NYSE: SKM), Helio’s sole remaining parent, was negotiating with Virgin Mobile USA to orchestrate a possible merger between the two companies, the South Korean carrier has announced that rumors regarding Virgin Mobile USA (NYSE: VM)’s acquisition of Helio were “groundless.”

SK Telecom wants us to know that it remains “committed” to Helio but that the company is “actively seeking opportunities.”

It’s not clear if reports from the Wall Street Journal and Reuters pointing to the two companies engaging in “early talks” have been misconstrued as merger-talks, or if Helio and all those involved want to keep a tight lid on the matter until things get ironed out.

[Via: MocoNews]

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 (NYSE: SKM), Helio’s only remaining parent company, and Virgin Mobile USA (NYSE: VM) 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 (NYSE: S), 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.

[Via: MocoNews]