SK Telecom has effectively gained governance over its MVNO Helio, which up until now has been run by co-owner EarthLink. SK Telecom allocated $70 million to make the transition, but it's also pledged another $100M for future devices and marketing initiatives.
Launched in May 2006 and led by EarthLink founder Sky Dayton, Helio reported a $192 million loss last year, with SK Telecom forecasting losses between $330 million and $360 million for 2007. SK president Kim Shin-bae nevertheless predicted in July that the MVNO would turn a profit by the end of 2008, citing projected subscriber totals of 200,000 by the end of 2007.
EarthLink CEO Rolla Huff denied rumors in late October that EarthLink would cut its losses and sell off its Helio stake. "I think that the investment that we've made there absolutely has value," Huff insisted at the time. "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. We're going to continue to be part of the governance structure and I think I've been saying all along, we believe there's value in this business."
For more on the shift:
- read this report from Engadget
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