Virgin Mobile Teams Up with Helio

June 30th, 2008

Last Friday, Virgin Mobile announced their intentions to buy off Helio, the mobile handset provider, from SK Telecom for 13 million shares in Virgin Mobile USA class A stock, the equivalent of about $39 million.  This, combined with their launch of an $80 unlimited flat rate calling plan with no contract, shows the company setting its sights on a more professional class of consumers, a clear contrast from their current youthful customer base.

In acquiring Helio, Virgin Mobile USA will not only get over 170,000 subscribers (who spend more that 3 times more per month than the average Virgin subscriber), but will also get Helio’s stylish handsets and access into the emerging 3G market.  Cellular-News reports that the typical Virgin customer spends only about $20 a month on pre-paid plans, but the purchase of Helio will allow the company to target consumers who spend between $40 and $70 a month.

Hopefully this step towards a new market will pay off and Virgin Mobile will be able to capture more US customers.  The acquisition of Helio will most definitely be a step in the right direction, but the risk remains very high, and it is becoming increasingly difficult to steal market share from such dominant national carriers in the US.  Either way, more competition in our mobile service can’t hurt right?

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