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Earthlink cutting costs, could mean severance of Helio

Yeah, we dig Helio, even though they don’t have a prepaid deal (credit to reader Melissa E for prompting our call to customer service to verify that). In fact, if they did, we might just drop our current plan and switch right now. They have killer phones and excellent voice and data features, all for a not-so-expensive price, all services considered. However, like Amp’d, they’re a money-sucking machine. Their advantage is that they don’t have a big telecom like Verizon calling in a debt. The bad news is that they’re owned by Earthlink, a company that isn’t doing so hot these days.

Earthlink announced this week that they are prepared to lay off 900 employees, close four offices while downsizing two others, and buy back $200 million of its own stock.

“These changes get our cost structure in line, but there is much more to do,” [CEO Rolla] Huff said. “While we recognize this is a difficult time for those affected individuals, this was a needed action for the company to better align our cost structure with our existing business.”

We remember Earthlink back from the days when they offered probably the best dial-up service out there. However, the days of dial-up are behind us, and Earthlink doesn’t quite have a hold on the broadband market. They’re really in a bind, and having Helio drain more and more money daily isn’t helping.

Part of this restructuring surely will involve plenty of debate about the fate of Helio. They’ve yet to turn a profit, which might lead some of the company’s executives to call for its demise. Helio does have plenty of potential, though, and it could just be a matter of time before it catches on and starts making Earthlink some money.

For right now they, Helio remains alive and — not well, but at least okay. It’s doubtful that Earthlink would pull the plug within the next six months, during which it plans to break even with its current cuts and anticipated restructuring costs. After that, expect more speculation as to the MVNO’s future.

[BetaNews]