Head honchos from soon-to-launch mobile virtual network operator Helio L.L.C. have been talking up their MVNO the past few weeks, speaking to groups at Morgan Stanley Dean Witter’s Wireless Forum and Jefferies Wireless Conference last week and also making an appearance at EarthLink Inc.’s analyst day.
Helio, a joint venture between EarthLink and Korean operator SK Telecom, has been funded initially with $440 million from the two companies and expects to launch service sometime this spring in the United States. While not offering many specifics, the talks offered some new insights into what sort of contender Helio could be in the much-hyped MVNO space.
Helio execs outlined their 36-million-member target demographic, which besides the increasingly popular 18- to 34-year-olds, affluent and tech-savvy, fell into three categories that they have dubbed “feed me” (young professionals wanting constant data connectivity); “spoil me” (most likely students, with lifestyles and/or wireless bills subsidized by their parents); and “see me” (users valuing style and trendiness in their phones). Also, the brand plans to target Korean Americans with a “Helio powered by SK Telecom” offering that emphasizes Korean language capabilities in the handset, text messaging to Korea and low rates on international calls to Korea.
Helio Chief Financial Officer Todd Tappin said Helio’s subscribers may be disproportionately Korean American at first, but eventually its core demographic is expected to dominate the subscriber base.
Both Chief Executive Officer Sky Dayton and Tappin made obvious their belief that as far as wireless is concerned, as Korea goes, so the U.S. eventually will go.
“If you want to see the future, get on a plane and go to Korea,” Dayton told the EarthLink audience.
Tappin said that Helio has licensed customer-care and billing platforms from SK Telekom and plans to have access to the fruits of its $200 million annual budget for research and development. The two handsets that Helio has announced, the black Hero and the pearly Sidekick, are based on Korean devices; the Hero, from handset manufacturer Pantech Co. Ltd., is the company’s first offering in the United States.
Both executives referenced several Korean services by SK Telecom that are likely to be similar to what Helio offers in the states, including full-track music downloads, mobile TV and interactive mobile gaming. Helio already has announced a partnership with social networking Web site Myspace.com that is expected to allow subscribers to share pictures, update their blogs and add or delete friends from the Myspace lists via their Helio phones. Tappin and Dayton compared Myspace to Korea’s Cyworld, where 30 percent of the population and 90 percent of teens and early twenty-somethings maintain pages on a Myspace-like virtual networking site.
Tappin told the Morgan Stanley crowd that Helio’s launch would be nationwide, that the MVNO has relationships with both Verizon Wireless and Sprint Nextel Corp. and that its launch has been timed with CDMA 2000 1x EV-DO buildouts so that when Helio launches, EV-DO coverage would be adequate. Verizon Wireless and Sprint Nextel both claim to cover around 150 million potential customers with their respective EV-DO networks.
Helio said it plans to build a handful of flagship stores that will offer “really great branded experiences,” according to Dayton, along with “smaller versions of flagship stores run by third parties,” some national retail chains and select dealers. The company intends to “blur the line between technology and fashion,” Dayton added.
Tappin also reinforced Helio’s previous guidance of signing up about 3 million customers and generating more than $2 billion in revenue by 2009. He noted that although Helio would subsidize its handsets, its target demographic is willing and able to pay for high-end phones.
“We’re not going to price ourselves out of the market, but we’re not going to compete on trying to be the lowest price in town either,” Tappin said. Although Tappin did not give details on contract lengths, he did hint that contracts would be “on the longer end.”
Despite inevitable comparisons to MVNO Amp’d Mobile Inc., which also has a target audience of youth, young professionals and early adopters, Dayton maintained that “there really is nothing comparable to Helio that’s come before.”
