Helio, one of America’s last great MVNOs, was swept up by Virgin on Friday for the bargain-bin price of $39 million bucks (in stock). Unfortunately, SK Telecom invested something like $500 mil into the troubled operator, so why’d they sell out so easily?

The answer, according to Engadget, is “either SK is playing the Korean tax system for the maximum possible write-off, or they literally didn’t have another soul to turn to in this whole wide world.” I’d opt for the latter – in the years that Helio was actually alive, it made a grand total of negative $560 million dollars (not counting 2008, which would’ve probably increased that number).

But looking at it from another angle – the cost per subscriber – Engadget says that Virgin’s purchase of Helio equated to about $280 per subscriber, whereas Sprint’s merger with Nextel equaled about $2350 per subscriber. And more recently, Verizon’s acquisition of Alltel ended up being somewhere in the vicinity of $2100 per subscriber.

We may never know how Virgin actually managed to negotiate a mere $39 million stock sale to SK Telecom for Helio. But I’d bet it had something to do with Sir Richard Branson and lowballing.

Read the full article: Engadget

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