Helio’s losing money like Where’s Waldo, so in a few years, it may just become another MVNO that couldn’t make it. EarthLink, a Helio parent-company, published its annual report to the SEC recently, and the news is grim: Helio lost over half a billion dollars in three years.
- 2007: Helio made $171 million, but spent $168 million due to the cost of sales, which includes wholesale airtime and hardware. This leaves them up $3 million, but…
- Helio also spent $332 million on operating expenses, which includes marketing, operations, member service, and, of course, the suits’ paychecks. That’s $327 million in the hole.
- 2006: Helio lost $192 million dollars against $47 million in revenue. So far, that’s a total loss of $519 million.
- 2005: Helio lost $42 million for a total of $561 million.
Wow, that’s over half a billion dollars! But it’s uncertain if Helio’s on a path of destruction or if this is just the typical story of a new company starting out at a loss. Majority owner and fellow parent-company, SK Telecom isn’t ready to give up. It gave the MVNO $20 million in February, and it says it’s willing to provide another $270 million should Helio need it.
The experiment of a company is growing, finishing 2007 with 180,000 subscribers, but this didn’t meet the minimum 200,000 goal the company had set for the period. Only time (the odd habits of consumers, and the poor decisions of executives) will tell how Helio’s story plays out. But remember, this doesn’t mean Helio’s going down the tubes, it just means it’s going through a bit of an awkward stage — like we all do eventually. The Ocean is a fantastic phone, and we highly recommend it.