Helio (wireless carrier)

Helio, Inc.

Former type	Joint Venture
Industry	Wireless communications
Fate	Acquired by Virgin Mobile USA, Inc.
Founded	January 26, 2005 (2005-01-26)
Defunct	August 22, 2008 (2008-08-22) Acquired by Virgin Mobile USA May 25, 2010 (2010-05-25) Helio brand retired
Headquarters	Los Angeles, California, United States
Number of locations	5 stores (2006)
Area served	Continental United States
Key people	Dr. Wonhee Sull - former CEO Sky Dayton - former Chairman
Products	Helio Kickflip Helio Hero
Services	Helio All-In Membership Helio A-la-Carte Membership
Owner(s)	SK Telecom 50% / EarthLink 50%
Website	helio.com sk-earthlink.com heliosocial.com
References: [1][2]

Helio, Inc. (stylized as HΞLIO) was a mobile virtual network operator (MVNO) using Sprint's network that offered wireless voice, messaging and data products and services to customers in the continental United States beginning on May 2, 2006. Originally a 50/50 joint venture founded in January, 2005 between South Korean wireless operator SK Telecom and American Internet services provider EarthLink, early losses caused EarthLink to stop providing additional funding in fall of 2007. SK Telecom provided the required additional funding to sustain Helio, which was re-organized as Helio LLC, and by January 2008, SK Telecom had assumed an increased ownership stake and with it, operational control of the joint venture. Although SK Telecom publicly pledged to support Helio, SK Telecom entered into talks to sell the company to rival MVNO Virgin Mobile USA. Virgin Mobile USA closed the acquisition of Helio and its 170,000 subscribers on August 22, 2008. Virgin Mobile USA exited the postpaid wireless business and retired the Helio brand on May 25, 2010.

History

Foundation

SK-EarthLink, Inc., the joint venture that would become Helio, Inc., was established on January 26, 2005. On October 26, 2005, EarthLink and SK Telecom announced that they had entered into an agreement to change the name of their joint venture from SK-EarthLink, Inc. to Helio, Inc. and provide a high-end wireless communications service targeting younger, bigger-spending customers.^[3] Helio provided service as a mobile virtual network operator, primarily via the Sprint Nextel CDMA network. The joint venture partners described their choice of the name "Helio" by referencing Copernicus' heliocentric view of the universe, saying that wireless communications is the center of the universe for Helio's target customers.^[4]

Strategy

SK Telecom hoped to grow its customer base in the United States due to stagnant growth in its saturated home market of South Korea. Helio management believed that Helio could avoid taking on the major US wireless carriers directly by targeting price-insensitive, technology-savvy consumers.^[3][5] EarthLink and SK Telecom agreed to provide an initial round of financing totaling US$440 million, with each partner owning 50% of the joint venture.^[4]

Service launch

When Helio first began offering service via a soft launch in May 2006. Initially, most of the promotion was done by word of mouth and at promotional events held across the country. On July 13, 2006, Helio began running TV commercials with the slogan, "Don't Call Us a Phone Company; Don't Call it a Phone." Helio also began advertising on billboards, in the print media, specifically in magazines that serve the 18-32 demographic, and on MySpace. Helio opened five corporate flagship stores located in Cherry Creek, Colorado, New York, New York, and in Palo Alto, San Diego and Santa Monica, California.^[6]

Marketing

On February 16, 2006 and in conjunction with its initial handset lineup, Helio announced it had partnered with MySpace. Helio created a custom portal for users to interface with the social networking site. Helio was one of the first wireless communications providers in the United States to use social networking as a major promotional strategy. Cingular, AT&T, Sprint and other competitors did not follow suit until months later.^[7][8]

Early financial losses

Substantial startup costs for Helio resulted in millions of dollars of losses per month. These losses caused EarthLink to post a loss for its first quarter of 2007.^[9] EarthLink and SK Telecom both upped their initial investments after it became clear that more money would be required to establish the new Helio brand. After this second round of financing ran out, EarthLink declined to provide further money to support Helio, stating that the investments in Helio were draining resources away from the company's core business.

Change of ownership and control

On September 21, 2007 EarthLink announced that SK Telecom would be increasing SK Telecom's investment in Helio by US$270 million and they would be adjusting ownership positions in the company accordingly and giving operational control to SK Telecom.^[10][11][12] In January 2008, CEO Sky Dayton was replaced by Dr. Won Hee Sull, a former executive of SK Telecom. Sky was named non-executive chairman of the board. In a press release announcing the management changes, SK Telecom reaffirmed their commitment to Helio.^[13]

Acquisition by Virgin Mobile USA

In May 2008, rumors arose that Helio parent SK Telecom was in talks with Virgin Mobile USA, Inc. over a possible merger.^[14] SK Telecom denied these rumors, but Virgin Mobile USA divulged that the two, in fact, were having preliminary discussions.^[15][16] On June 27, 2008, Virgin Mobile USA announced that it would pay $39 million in stock for Helio after SK Telecom promised to invest immediately $25 million in cash in Virgin Mobile USA.^[17][18] Virgin Mobile USA completed its acquisition of Helio, Inc. on August 22, 2008. Helio had approximately 170,000 subscribers at time of the acquisition.^[19] On September 9, 2008 Virgin Mobile USA announced a new brand, "Helio by Virgin Mobile", and a new marketing slogan "Plan To Have It All". Virgin Mobile USA also announced a change of monthly plans and their first integrated phone, the PCD "Shuttle".

Helio brand defunct

Sprint Nextel announced in March 2010 that Virgin Mobile USA would stop providing service to its Helio post-paid customers. Sprint Nextel offered Helio customers incentives to switch to Sprint branded service and were told that if they did nothing their service would be disconnected on May 25, 2010.^[20]

Products and services

Plans

At launch in 2006, Helio offered three "Helio All-In Membership" monthly plans of unlimited data and SMS messaging combined with 500 voice minutes for US$65, 1000 voice minutes for US$85, 1500 voice minutes for US$100 or 2500 voice minutes for US$135.^[6]

Helio also offered "Helio A-la-Carte Membership" monthly plans that offered 500 voice minutes for US$40, 1000 voice minutes for $60 or 1500 voice minutes for $80 combined with pay-as-you-go US$.02 per kilobyte data and US$.10 per domestic incoming or outgoing text message.^[21]

Handsets

At launch, Helio offered two models, the Helio Kickflip and Helio Hero.^[22] These handsets were replaced by the Samsung Drift slider in November 2006 and the Samsung Heat slider in March 2007.^[23][24] In May 2007, Helio introduced the Ocean, its flagship dual-slider. In August 2007, Helio launched the Fin, an ultra-thin folder with a magnesium body.^[25][26] In December 2007, the Mysto slider saw a limited release to the Korean American market, which was followed up by a general market launch in January 2008.^[27][28] On February 12, 2009, Helio launched sales of the Ocean 2 by Virgin Mobile, a device much like the original Ocean but sleeker and having new features.^[29]

Helio was criticized for not having the latest phones its marketing promised. Almost all of Helio's handsets were re-branded versions of older Samsung phones that had been offered in South Korea for some time and were not cutting edge at the time of their offering in the United States. Helio handsets' features and specifications were on par with, not better than, offerings from rival American wireless providers.^[30] Helios was awarded US Patents for user interface design directed by Matias Duarte.^[31]

Broadband Internet access

In October 2006, Helio began offering a combined 3G and Wi-Fi broadband Internet access service for personal computers. Customers accessed the Internet from their PC via Helio's 3G wireless service, 50,000 commercial Wi-Fi hotspots operated by Boingo or free Wi-Fi hotspots. The service required use of the Helio Hybrid PC card, a re-branded Sierra Wireless AirCard. The Helio Hybrid PC card was offered at no cost when customers subscribed to a two-year term agreement costing US$85 per month. In contrast, consumers at the time could choose similar service sold under the Sprint brand for $60 per month.^[32]

References

External links