Earthlink reported the results of its third quarter and reassured analysts that it had no plans to sell its stake in Helio, which the company said "is continuing to roll out and ramp up its innovative wireless services." During the third quarter the MVNO brought in $52 million in revenues, up from $13 million this time last year, and produced a net loss of $92 million, also up from last year's $62 million. Earthlink executives also commented on the recent financing SK Telecom pumped into the MVNO and why Earthlink chose to back away from more investment in Helio.
"Earthlink is restructuring its Helio joint venture agreement with SK Telecom, thus eliminating the need for Earthlink to contribute additional money to that effort while maintaining a significant ownership position in that growing venture," CEO Rolla Huff said. "While the definitive amended joint venture agreements are still being finalized by our respective lawyers, the key economic provisions have been agreed to in principle. We believe this will result in our Helio investment having future value as Helio continues to grow."
"While we all know there's been some disappointing stories in this space, Virgin Mobile hopefully has proven that value can be created with the right business model," Huff said. "I think that the investment that we've made [in Helio] absolutely has value. We have no plans to go out and sell it. It's a growing business. It's a business that we support. We clearly understood that putting needed cash into that business was not in the best interest of our shareholders from here on out."