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The End of Helio: Sold For $39 Mil

June 28, 2008 in Wireless Industry News

Helio, one of America’s last great MVNOs, was swept up by Virgin on Friday for the bargain-bin price of $39 million bucks (in stock). Unfortunately, SK Telecom invested something like $500 mil into the troubled operator, so why’d they sell out so easily?

Helio = Gone

Helio: worth $39 Million

The answer, according to Engadget, is “either SK is playing the Korean tax system for the maximum possible write-off, or they literally didn’t have another soul to turn to in this whole wide world.” I’d opt for the latter – in the years that Helio was actually alive, it made a grand total of negative $560 million dollars (not counting 2008, which would’ve probably increased that number).

But looking at it from another angle – the cost per subscriber – Engadget says that Virgin’s purchase of Helio equated to about $280 per subscriber, whereas Sprint’s merger with Nextel equaled about $2350 per subscriber. And more recently, Verizon’s acquisition of Alltel ended up being somewhere in the vicinity of $2100 per subscriber.

We may never know how Virgin actually managed to negotiate a mere $39 million stock sale to SK Telecom for Helio. But I’d bet it had something to do with Sir Richard Branson and lowballing.

Read the full article: Engadget

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