So they spent 38 mil to buy Helio and just dump it in the trash.
Arguably, Helio really cost them nothing.
They gave SK Telecom about $39M. SK Telecom then invested $25M in VM - net cash outlay: $14M. But wait - VM got 85,000 Helio handsets worth, allegedly, $17M. I assume these have been mostly sold or distributed, as we've been watching the dwindling contract offerings on the old Helio side of things. Net gain to VM - $3M. (If there are any remaining Helio handsets, they are probably useless [except as warranty replacements, perhaps], and will need to be written off.)
Plus, an intangible benefit - Sprint gets the remaining Helio customers who are still in contract or wish to stay as month-to-month customers (all six of them ).
Or they eliminated a competitor for the same customers. Some businesses buy competitors and shut them down to avoid having to compete with them.
I thought Helio was a complement to Virgin Mobile. I definitely didn't see them as a competitor.
VM - low end phones with slow 1xRTT data and no roaming
Helio - high end phones, EVDO data and roaming
VM - no contracts, lower price tiers. Target demographic - teenagers without parental subsidy
Helio - contracts, starting around $65 a month (moved down, I believe, as Helio began to fail). Target demographic - young professionals, or teenagers with considerable parental subsidy.
They would have been extremely successful offering the Helio line-up on prepaid. It was a mistake on VM's part to not offer prepaid options for those devices.
They would have been extremely successful offering the Helio line-up on prepaid. It was a mistake on VM's part to not offer prepaid options for those devices.
i agree. i would have loved to get an ocean 2 on prepaid.
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i agree. i would have loved to get an ocean 2 on prepaid.
Who knows, maybe the reason they got rid of Helio last week was so they could reprogram all their phones to work on VM, and maybe that'll be this supposed "Feb 16th" thing that people are talking about...very doubtful, but if that was the case, I'd be a happy VM customer all over again...to have the Ocean2(or even the first one) would be great
I thought Helio was a complement to Virgin Mobile. I definitely didn't see them as a competitor.
VM - low end phones with slow 1xRTT data and no roaming
Helio - high end phones, EVDO data and roaming
VM - no contracts, lower price tiers. Target demographic - teenagers without parental subsidy
Helio - contracts, starting around $65 a month (moved down, I believe, as Helio began to fail). Target demographic - young professionals, or teenagers with considerable parental subsidy.
I thought Helio was a complement to Virgin Mobile. I definitely didn't see them as a competitor.
VM - low end phones with slow 1xRTT data and no roaming
Helio - high end phones, EVDO data and roaming
VM - no contracts, lower price tiers. Target demographic - teenagers without parental subsidy
Helio - contracts, starting around $65 a month (moved down, I believe, as Helio began to fail). Target demographic - young professionals, or teenagers with considerable parental subsidy.
I was referring to Sprint eliminating a competitor. Helio apparently fit into VM's plans or the company wouldn't have bought them. Those plans must have changed with Sprint at the helm. Since Sprint is a much larger company, the relative value of the Helio acquisition would have been a lot smaller, too.
Sprint might also have been able to write off the loss of Helio for tax purposes. That writeoff might have even made the purchase of VM more appealing. The tax code is quirky that way.
Who knows, maybe the reason they got rid of Helio last week was so they could reprogram all their phones to work on VM, and maybe that'll be this supposed "Feb 16th" thing that people are talking about...very doubtful, but if that was the case, I'd be a happy VM customer all over again...to have the Ocean2(or even the first one) would be great
Sprint Nextel narrowed its fourth-quarter loss, but added fewer pre-paid customers than Wall Street expected, suggesting the business fell victim to the intensifying competition at the low end of the market.
The 4th Qtr prepaid slowdown for Sprint, is being addressed. They already introduced the BB service and new cdma handset options for Boost, now they need to increase the VM arpu numbers. VM already has less churn than Boost, the best way to increase the VM arpu is with better devices on prepaid monthly service plans. IMO Boost has always had more churn than VM b/c of BoostMobile's limited and at times stale handset selection.
Sprint might also be looking to acquire metropcs. http://online.barrons.com/article/SB...ons_technology
That would be good for Sprint but not for most prepaid wireless consumers, since metropcs was the primary reason we have seen all the majors adjust their prepaid pricing models to better compete against regional carriers like CricKet & metropcs's low cost service models.
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Originally Posted by sicilian1
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