Mobile + youth = big profits? Not yet for Virgin and Helio

June 25, 2008

richardbranson.jpgVirgin Mobile USA is in talks to acquire Helio, the U.S. mobile arm of South Korea’s SK Telecom, to combine their struggling businesses, according to the Financial Times on Wednesday.

Though speculation about the talks had been knocked down by Bernstein Research analyst Walter Piecyk on Tuesday,  the companies seem serious about merging the two businesses, which focus on the youth end of the market.

Virgin Mobile, partly owned by British enterpreneur Sir Richard Branson and Sprint Nextel Corp, serves more than 5 million customers. Helio is 69 percent owned by SK, with US Internet provider EarthLink owning 28 percent.

While Virgin and Helio have struggled somewhat with businesses that rely on America’s youth, BlackBerry maker Research In Motion is going from strength to strength by focusing on the grown-ups.  As our analysis shows here, RIM is expected to post earnings and revenue at the high end of forecasts later on Wednesday.

Keep an eye on:

 * Publicis launched a strategic initiative called VivaKi to boost performance in the fast-growing digital advertising market (Reuters)

 * Charter delays plan for targeted web advertising (Reuters, WSJ)

* The world’s first advertising-funded mobile telecoms operator, Blyk, will enter the highly competitive German, Spanish and Belgian markets next year (Reuters)

(Photo: Reuters)

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