Hot Air from Helio

The US based Helio MVNO looks like it is burning through the US$440m that Earthlink and SK Telecom have committed to at a rapid pace of knots. Earthlink in their Q2 results are forecasting losses for the year of US$150m-US$170m.

Helio is starting to advertise and the first commercial is on the web. The second is also uploaded. Notice that Helio are not pushing the voice service, but the ability to upload stuff to Myspace. Helio also sponsor a radio show from LA that I listen to on the web: in the commercials they are forever pulling that Helio is the first company to figure out how to link the device to Myspace - hardly a long term Unique Selling Point. The fact that Helio have reduced the prices on the monthly bundle smacks of a mixed message to me.

It also doesn't help that the handset supplier, VK Mobile, has gone bust. UK Vodafone watchers will remember VK Mobile launching onto the UK market 18 months ago with the pink Christmas prepaid handset which has since been copied by all and sundry.

According to SK Telecom, Helio is expected to have 3.3 million customers and $2.4 billion in annual sales by 2009 . They may well have 3.3million customers, but I seriously doubt that the ARPU will be US$60 per month and I also seriously doubt that Helio will be profitable. It is all going to end in tears and the only long term winner is going to be wholesale carrier, which is Sprint Nextel. I suspect Sprint are ready and waiting with a Myspace service to be launched if Helio shows any signs of taking off.