Virgin Mobile seems to have a keen interest in offering SK Telecom handsets to its prepaid customers. Will it ultimately result in a joint venture with Helio?
In a short statement, Virgin Mobile USA confirmed today that the company is in preliminary discussions with SK Telecom to explore possible strategic opportunities. Virgin Mobile USA said these discussions are in early stages, and there are no assurances that any transaction will result. Virgin Mobile USA will have no further comment unless a definitive agreement is reached.
With a customer base of approximately five million, Virgin Mobile USA focus on offering affordable prepaid handsets like the Wild Card, Super Slice and Flare. SK Telecom on the other hand, has generated most buzz in the U.S. for its Helio branded handsets.
Both Virgin Mobile USA and Helio are struggling to achieve sufficient visibility in the crowded mobile market, and a joint venture could certainly help both to attract new customers. Teens that start out with a prepaid handset, may for instance want to eventually upgrade to a multimedia handset later on, and then Helio's strategy would come into play. Virgin Mobile USA on the other hand, would get increased average revenue per customer by holding a stake in Helio. SK Telecom's handsets have also performed better when it comes to calling and light messaging in our extensive testing, compared to Virgin Mobile's offering.
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