Here's another one of those mobile virtual network operators that only two years ago was one of the hottest players in the telecom biz. Basically, they're cell phone service resellers that offer souped-up phones and services for special audiences - generally guys in their early 20s. The problem is that all the major players are now offering those same souped-up phones and services. Among the notable casualties last year was L.A.-based Amp'd Mobile, though not until hundreds of millions of dollars of VC money were burned. Now it's looking like Helio, an L.A. company that was started by Sky Dayton, is about to disappear. It might wind up being sold to Virgin Mobile, which is having its own problems, but even before that happens there are reports that some of its retail stores are shutting down. From Electronista:
While the latest move isn't confirmed, Virgin Mobile has previously said it has been involved in talks with Helio's majority investor SK Telecom over the possibility of "strategic" deals that are widely believed to involve Virgin assuming control of Helio and potentially putting an end to the brand altogether. Korea-based SK Telecom has officially denied talks but also said it has been investigating chances to improve its business in the US. The US market for MVNOs has rapidly contracted in the past year and has seen the closure of one-time Helio rival Amp'd Mobile and financial troubles at Qwest, pointing to a rapid contraction of the market for non-native carriers in the US. In addition to being overshadowed by larger and more established carriers, most MVNOs have to purchase airtime from Sprint and other incumbents that often boosts pricing higher than for larger competitors.
By the way, Virgin Mobile is now offering a flat-rate, unlimited calling plan in an effort to compete with the big four cell phone operators. Starting July 1, the new prepaid service will include free nationwide calling with no roaming charges for $79.99 a month. Helio already has a flat-rate plan.