"If we didn't do something like this, we would fall further behind."Īlso See: Avoid The Big Carriers! Cellphones Your Wallet Will Love SK Telecom May Double Down In U.S.Notes : *The mobile phones shown on this page are for reference only and may not reflect the actual product. "Scale is the key to success in this business," he said. In the analyst call, Schulman noted that his company had little choice but to acquire a rival. In the end, the death of Helio may not ensure the survival of Virgin Mobile. wireless market fills up, with more than 80% of Americans already owning a cellphone, carriers are targeting young consumers directly and also being more cautious about who they allow onto their networks. Sprint will also give the company a $10 million break up-front.Īnalysts warn that the wireless market has morphed into an unfriendly place for MVNOs. Schulman said Virgin Mobile anticipates at least an 8% discount in network costs in 2009. The acquisition also calls for job cuts at Helio and store shutterings to reduce costs, and the companies have already leveraged their combined heft to negotiate better rates with Sprint, from which they lease airwaves. This could slow down the thousands of subscribers who leave Virgin Mobile each month in search of more sophisticated phones and services, Schulman noted. Virgin gets Helio's 170,000 subscribers and plans to leverage the company's snazzy technology to introduce advanced services and high-end phones in 2009, Virgin Mobile Chief Executive Dan Schulman said in an analyst call Friday. But when it failed to keep pace with larger carriers by launching 3G services such as mobile TV or video, it became "just another low-cost, prepaid phone service," Hold says.Īnalysts say Helio should inject a little cool into Virgin Mobile. At its 2002 launch, Virgin Mobile cultivated a brash, youth-oriented image, supported by content deals with MTV. Warren, N.J.-based Virgin, which has five million customers, is partly owned by Richard Branson's Virgin Group and Now, Helio seems to have met its odd-couple match in Virgin Mobile. "When someone buys into a two-year plan, they want to feel sure that you'll be there two years from now," Hold says. "Either way, they probably wouldn't buy an Ocean, so that market was already taken."įinally, the recent string of MVNO failures, from Amp'd Mobile to Disney Mobile to Mobile ESPN, may have scared off consumers. "People either love or hate the Sidekick," Hold says. But over time it suffered from comparisons to T-Mobile's Sidekick. Its most eye-catching model, the Ocean, won early raves for its sliding QWERTY keyboard, fast 3G data access and global positioning system. But the premium offering carried a premium price with plans that ranged from $65 to $99 a month.Įven Helio's phones, which were supposed to be its key selling point, had flaws. And Helio won kudos for introducing some innovative services, such as early partnerships with MySpace, YouTube and Flickr. Helio's "best of both worlds" strategy of offering the coolest phones with advanced data services sounded good on paper, though. "What did Earthlink ever get right in the wireless market?" "I never bought into the genius of Sky Dayton," Hold says. Dayton, who had also started Earthlink, was a media darling, but didn't have direct experience with the mobile industry. The company, a joint venture between Internet service provider Earthlink and Korean operator
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