Virgin Takes a Helio Bride

Virgin Mobile USA will acquire one of the last standing MVNO (Mobile Virtual Network Operator) in spending $39 million for Helio. The mobile carrier aimed at the young and hip was co-founded by Earthlink and Korea’s SK Telecom. But like Disney Mobile, ESPN Mobile, and Amp’d MVNOs that crashed and burned, Helio never broke through with consumers. Virgin takes over a mere 170,000 Helio customers. When we first started covering the MVNO space several years ago, pundits said that 500,000 to one million subscribers was a bare minimum for a company to survive the model. Others always speculated that the MVNOs were really start-up ploys designed to attract buy-outs by major carriers in the end. But 170,000 subscribers after several years in business? That amounts to an accounting error at Verizon. Virgin may hope to enter the postpaid wireless game by grabbing Helio. Much of its existing base is younger and using prepaid cards. Helio, which represented higher end handsets and traditional contracted plkans with more advanced data services, may add to Virgin some new models. But it is hard to see how the underperformaning acquisition adds that much to Virgin, which is itself the most successful MVNO in the U.S.