Update: SkTelecom spokespeople have rejected claims stating that the carrier was looking to purchase Virgin Mobile in order to pump money into the MVNO and purchase Helio from itself.
The company has stated that the initial report by the Dow Jones and Reuters was groundless.Â The company has also confirmed that the South Korean carrier still remains committed to the Helio venture but added that it continues to look for ways to expand its presence in the US.
With talks taking place internally at T-Mobile for a possible acquisition of Sprint, there is speculation that two other companies are looking to merge. Helio and Virgin Mobile are also in the first stages of the â€˜proposedâ€™ deal.
With both being MVNOs, Helioâ€™s merger with Virgin Mobile would create a larger customer base which would result in higher bulk purchases of wholesale service from Sprint as they both work off of Sprintâ€™s CDMA network.
SK Telecomâ€™s Helio and Virgin Mobile are both known for targeting the younger demographic. Helioâ€™s customer base tends to spend more on their monthly service (average of $85) while Virgin Mobileâ€™s customers average about $25 a month. The merger of the two companies would benefit each other as they will be able to combine the average and high end users. With Earthlink backing out of Helio and with both companies showing poor financial earnings, Virgin Mobileâ€™s retail strategy can help Helio reach a wider audience.