Helio was the driver of this big loss. The mobile virtual network operator (MVNO), a cell operator that doesn’t own its infrastructure but purchases access from “real” operators, is a joint venture with SK Teelcom, and had a net loss of $191.6m that quarter, with EarthLink booking half that loss. Helio is acquiring customers at a much slower pace than hoped, and will see losses for the foreseeable future, perhaps hitting cash flow positive by 2009. They had 70,000 subscribers signed up as of Dec. 31, 2006, and 100,000 anticipated by mid-2007; the division expects 200,000 to 250,000 by the end of 2007. [WFN]
Some indicators are good: Revenue up 5%; BB up 35%; and dial-up down just 15%.
MVNO's are not doing well as a sector. Amped "signed up only 30,000 subscribers within eight months of full marketing", according to CNET news. Helio had about 70,000 with ARPU of about $100, compared to the big 3 (Sprint, VZW, Cingular) at $40-50. But Helio is bleeding cash heavily -- to the tune of about $220M so far.