Virgin talks merger with Helio

What do you get when you cross an MVNO that struggles to make a profit with another MVNO that struggles to make a profit? We might find out, as Virgin Mobile is in talks to acquire Helio. Well, it might not be that simple. See, SK Telecom, the company that owns Helio, wants to make a bigger imprint in the U.S. So things might get a bit complicated.

The discussed scenario seems to put SK Telecom at the helm. They’d buy out Virgin Mobile, and then “do a cash infusion” (quoting because I’m not completely sure what it means). The new entity would then buy Helio in an all-stock transaction. This would allow them to move forward as one company.

This would give Virgin Mobile a prepaid and a postpaid service. Because both MVNOs run on the Sprint network, they could make handsets from both companies available across the service. The only problem, I suppose, is how they would go forward with obtaining minutes from Sprint. Surely, they don’t have the same wholesale deal with the company.

mocoNews talked to VM CEO Dan Schulman earlier in the week. While he couldn’t comment directly, he did send a hint of what’s to come:

“We don’t comment on any rumors out there, but we have said that we believe that there are opportunities for us in terms of non-organic growth, such as another MVNO, or capability set that we might be able to avail ourselves of…Certainly there are a lot of opportunities that we see, and we think some of them are intriguing for us, but it’s a matter of what makes the most sense.”

Clearly, we’ll have more on this as it develops.

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