Virgin Mobile, USA announced on Wednesday that they are talking with SK Telecom about a possible merger or business relationship in the US MVNO market place. Virgin Mobile is one of the largest MVNOs with just over 5 million subscriber in the US and SK Telecom, Korea's largest mobile provider, has a US product on the Sprint network (same as Virgin) called Helio and has about 200,000 subs in the US. Both companies declined to comment on any of the details of their discussions, only stating that they are talking.
Helio Mobile was formed a few years back with Earthlink in an attempt to try and gain a share of the US prepaid mobile marketplace, but has been loosing considerable amounts of money on this venture almost since the start and they just have not been able to grow the subscriber base enough. The guess is that SK Telecom is looking for a way out of this money looser and Virgin seems to needs the subscriber growth... so the marriage seems to make sense. The logical step, should this deal go through, is that the Helio brand would disappear and everything would be transitioned over to the Virgin Mobile product line. Since they are both using the Sprint network then the transition should be easy and relatively painless for both Virgin and Helio customers.
Shares of Virgin Mobile, USA shot up almost 43% as a result of this announcement!
Helio Mobile was formed a few years back with Earthlink in an attempt to try and gain a share of the US prepaid mobile marketplace, but has been loosing considerable amounts of money on this venture almost since the start and they just have not been able to grow the subscriber base enough. The guess is that SK Telecom is looking for a way out of this money looser and Virgin seems to needs the subscriber growth... so the marriage seems to make sense. The logical step, should this deal go through, is that the Helio brand would disappear and everything would be transitioned over to the Virgin Mobile product line. Since they are both using the Sprint network then the transition should be easy and relatively painless for both Virgin and Helio customers.Shares of Virgin Mobile, USA shot up almost 43% as a result of this announcement!
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