February 7th, 2007
You say Helio, and I say goodbye
My colleague Marguerite Reardon offers a piece about how mobile virtual network operator Helio continues to be a drag on 50 percent-owner EarthLink's bottom line.
The numbers are ugly- $74 million for the 4Q 2006 and $191.5 million for the year. Helio has about 70,000 subs that pay in around $100 per month for basic connectivity and advanced data services, but as Marguerite writes, cost of subscriber acquisition is massive.
EarthLink and Helio's other owner, SK Telecom, are sticking with Helio. But how much more money are they going to pour down this rathole?
Yes, a rathole. In this environment where mainstream cell carriers will spare no expense to get their marketing and content propositions on any advertising media- mainstream or niche- that youthful eyeballs might encounter, how much chance does Helio really have to break out of niche player status?
Lesson 1: you can't market niche platforms and services in a conventional manner.
And sorry, I just don't see the virality here yet. Yea, sounds like a Stephen Colbert word, but I think that applies.
Prediction: unless things change, I believe Helio will be purchased by a major telecom. Then, they will integrate it as a niche app or perhaps, as an added suite of services.
Russell Shaw is an enterprise computing journalist, analyst and author based in Portland, Oregon. See his full profile and disclosure of his industry affiliations.
