Virgin agrees Helio deal

30 Jun 2008

Virgin Mobile USA has agreed a USD39 million all-stock deal to acquire rival mobile virtual network operator (MVNO) Helio from SK Telecom and EarthLink. Virgin has attracted more than five million subscribers to its mobile resale business in the US, but has been struggling to add new customers as the market moves towards saturation. Though Helio has just 170,000 subscribers, it has concentrated on the more lucrative post-paid sector while Virgin has targeted low-end pre-paid users. Virgin Mobile USA’s chief executive, Dan Schulman, told Dow Jones Newswires that the deal would be ‘enormously beneficial’. ‘It’s a natural evolution to be offering a complete portfolio,’ he said. Virgin will hand over 13 million Class A shares to SK Telecom and EarthLink’. SK Telecom will also invest a further USD25 million to take its stake in Virgin Mobile USA to 17%. Both Virgin and Helio use capacity on the nationwide CDMA network of Sprint Nextel.

United States