What the Helio? MVNO Is Back After First Flop
If you go back a decade, MVNO used to be a dirty word in the wireless industry with high-profile flops from the likes of Disney, Amp'd Mobile and ESPN discouraging others from attempting to wholesale wireless access.
Fast forward to today and MVNOs -- mobile virtual network operators -- that offer branded wireless service they wholesale from established wireless operators, are common and, in some cases, giving the networks they use a run for their money. (See FreedomPop Grabs $30M More in Funding and Sprint Builds an MVNO Factory.)
The changing market dynamic is probably the reason one of the most high-profile MVNO flops, Helio Inc. , is resurrecting itself.
Helio was one of the very first US MVNOs, a joint venture between SK Telecom (Nasdaq: SKM) and EarthLink Inc. (Nasdaq: ELNK) that began targeting US youth with wireless voice, messaging and data service on Sprint Corp. (NYSE: S)'s 3G network in May 2006. It still ranks in the top five for the biggest venture capital financing rounds ever, having raked in $440 million before its launch in 2005. (See Helio Launches in US and Baby, You Can Fund My Car: Uber Drives August VC.)
But, in August 2008, the cash-rich MVNO was merged with Virgin Mobile USA Inc. (NYSE: VM) and eventually shut down in May 2010 when Virgin was acquired by Sprint. (See SKT Plans $2.2B Spending Spree and Helio, Goodbye.)
Now, according to Helio's website, South Korea's UBI Telecom has reopened the Helio prepaid wireless service with a $29 monthly plan for unlimited talk, text and data capped at 128 Kbit/s on Sprint's network with the option to roam on to Verizon Wireless when needed.
The landscape for MVNOs in the US has changed dramatically in the last decade. While initial attempts -- like those from Helio, ESPN, Amp'd and Disney -- focused on young people or brand cachet, most MVNOs today serve the cost conscious and rely heavily on WiFi. They've been successful enough at attracting interest that big players like Google (Nasdaq: GOOG) and cable companies like Cablevision Systems Corp. (NYSE: CVC) are taking a run at the space as well. (See Google's WiFi-First Mobile Service 'Fi' Is Here, Cablevision's New WiFi Try – Freewheeling Enough?, Mobile Mouse Shut Down and Amp'd Switches Off.)
Helio is hoping its combination of Sprint and Verizon networks, low costs and a BYOD handset policy will set it apart in the once-again crowded MVNO space in the US. (See Sprint Policy Change Spells Trouble for MVNOs.)
With a new backer and a free month trial offer, Helio should have a fair shot in its second life, but only if it has learned from the mistakes of its first, expensive flop.
— Sarah Thomas, , Editorial Operations Director, Light Reading