Don’t expect Helio to be profitable until 2009

Image for the article Don’t expect Helio to be profitable until 2009

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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