Monday, March 03, 2008

Helio lost $500M

Helio has 180,000 subscribers now. Here's what Alley Insider has to say about Helio numbers:

Last year, Helio booked $171M in revenue: $115M came from selling cellphone service and another $56 million from selling phones and accessories. Cost of sales: $168 million, including $71 million on wholesale airtime and $97 million on equipment. This leaves them $3 million -- a 2% margin. But then there's another $332 million (!) of operating expenses -- including $160 million spent on sales and marketing, $99 million spent on operations and member service, and $66 million spent on general and administrative costs. Net loss: $327 million.

ELN, in its SEC filing, had a couple of interesting things to say:

  1. EarthLink admits in the SEC filing it "may not realize the benefits we sought from our investment in the Helio joint venture."
  2. The filing goes on to note that ELN dumped in $210M, which it will probably not recoup;
  3. Helio will continue to lose money;
  4. "There can be no assurance that these initiatives will be commercially successful." [fierce]

1 comment:

Tommy Franklin said...

Helio has a long way to go, but with patient investors, Helio will be able to ride out the wave and come out on the top. Their revenues and subscriber numbers topped their goals. They just need to cut costs and they will be on target to hit profitibility mid 2009.

Asif Ahmed