Don’t expect Helio to be profitable until 2009
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Is Helio cool enough to interest their target users? The last financial results of the mobile virtual network operator (MNVO) for the MySpace generation is scary. Helio is expected to loose $300 million to $360 million in 2007, according to EarthLink’s chief financial officer. This will be almost twice the last year lost of $192.5 million ($74 million in the fourth quarter), and could be explained by a stiffer competition and the incoming iPhone roll-out.
Will Earthlink and SK Telecom, the companies backing the MVNO, keep pouring money in the venture? Yes. As explained Dave Whetstone, co-founder of Virgin Mobile USA: “If you’re SK Telecom and you want to get into the U.S. mobile market, it might be less expensive to throw a couple hundred million dollars every year into Helio than to spend billions on spectrum or a nationwide operator.”
Good sign: Helio reported monthly average revenue per user of about $100, well above the $40 to $50 a month the big carriers are reporting. So the venture anticipates some profitability by 2009. A long way to go, maybe a bit too long for its partner, MySpace, which would like to ink some deals with other mobile operators.
Feb 8, 2007 | By Nuno
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