Richard Branson's Virgin Mobile USA and South Korea's SK Telecom, which controls US MVNO Helio, are in early talks on a deal, according to an industry source, quoted in a Reuters report.
The person, who was not authorised to comment on the matter and asked not to be identified, declined to specify the nature of the talks, the report said.
'Virgin Mobile and SK Telecom are having preliminary talks,' said the source.
Recent blog reports said the talks have included scenarios such as SK Telecom buying Virgin Mobile USA, which had a market value of about US$170 million (â‚¬110 million), and combining it with Helio.
Under one scenario that has been discussed, SK Telecom would buy out Virgin Mobile USA and do a cash infusion; then Virgin Mobile would buy Helio in an all-stock transaction, moconews.net said in a blog post.
The source told Reuters it was too soon to say how a deal would be structured, whether it would involve a merger of the US entities, or a purchase of Virgin by SK, or other possibilities.
Both Virgin Mobile USA, part owned by Branson's Virgin and Sprint Nextel, and Helio rent space on Sprint's wireless network to target young mobile phone users.
Virgin, which has been suffering from customer defections amid US economic weakness, focuses on prepaid services, where customers pay for calls in advance.
Representatives for Helio and Virgin Mobile USA declined comment and an SK Telecom spokeswoman was not immediately available for comment, the Reuters report further said.