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  • Australian Firm SMSpup Launches Ad Subsidized Mobile Phone Service

    Australian telecom firm ComTel is making a brave move: it is launching SMSpup Mobile , a new prepaid MVNO service offering AU$130 of talk and text value for AU$29 per month but customers who agree to receive five SMS or e-mail ads per day will only be charged AU$10, a 65 percent discount. The MVNO runs on local Vodafone ( NYSE: VOD ) network, and follows ComTel's integration of its pre and post-paid MVNO businesses with Empowered Communications, a local permission-based e-marketing group that it acquired in October 2007 for AU$23.7 million. PCWorld AU : One of the catches of the new service for subscribers is that if they do not view 50 percent of the advertising messages they are sent, then SMSPup Mobile reserves the right to remove the discount. ComTel says its service is modeled on the Blyk service launched in the UK in late 2007...which itself is in an early stage and remains to be seen it these experiments pan out. Our mobile application for Blackberry and other Smartphones brings you the latest headlines when you're on the go. Go here to download .
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  • Virgin Mobile USA Closes Helio Acquisition

    Virgin Mobile USA ( NYSE: VM ) said today it received all regulatory approvals for its acquisition of Helio. With the deal completed, Virgin Mobile will be able to expand its services from only pre-paid to also postpaid and to offer higher-end data services. In all, Virgin Mobile is getting more out of the transaction than either of Helio's shareholders SK Telecom ( NYSE: SKM ) or Earthlink ( NSDQ: ELNK ), which will receive 13 million shares with a value of $38 million. Virgin will not only gain 170,000 Helio customers, but it also was able to renegotiate its deal with SprintNextel to lower the cost per minute by 8 percent in 2009. SK Telecom and Virgin Group are also both investing $25 million in the combined entity, which will lower the company's debt. Release. Dan Schulman, Virgin Mobile USA's CEO said: "Adding Helio's differentiated postpaid offer to Virgin Mobile USA's existing portfolio will expand both our market opportunity and our ability to deliver new products and services more rapidly...We look forward to revealing our roadmap for expanded, innovative offers in the near future." Related Virgin-Helio: Interview: VMUSA's CEO Dan Schulman: Merger A "Transformative Deal For The Company." Virgin-Helio: Execs Explain Tie-Up; Confirms Helio Store Closures And Other Reductions Virgin Mobile Acquiring MVNO Helio For A Paltry $39M In Equity; Gets $50M Cash Investment Our mobile application for Blackberry and other Smartphones brings you the latest headlines when you're on the go. Go here to download .
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  • VMUSA Call: Helio Cuts Expenses In Preperation Of Merger; Deal To Close In Next Few Weeks

    Virgin Mobile USA ( NYSE: VM ) reported its second-quarter earnings today saying its performance was affected by changes in consumer spending and a poor economy. During the quarter, profit fell 50 percent to $3.5 million and net service revenues fell 6 percent to $291.4 million, compared to the year ago period. However, the company performed better than expected. Here's highlights from the call ( transcript by Seeking Alpha ): -- Helio update : VMUSA's CEO Dan Schulman said as previously stated Helio was contractually required to cut their costs by about 70 percent before the deal closes and they are on track to do this by reducing its staff by more than two-thirds and have closed nearly all of their retail stores and kiosks. In addition, Helio is already getting the cost benefit of Virgin's network rates. Schulman hopes to close the deal in the next few weeks. "The Helio acquisition is transformative for us. The addition of a post-paid platform, outstanding data services, and compelling handsets will enable us to offer more value to our entire customer base; prepaid, hybrid and post-paid alike," he said. Watch out for new products and services, and plans and handset over the next several quarters. -- Customer Additions : The company lost about 111,000 customer during the quarter, which was an increase over the year-ago period, but better than expectations. The quarter can be the seasonally weakest period for net customer additions, however, was able to produce an improved result due to churn being better than expected for the quarter at 5.6 percent. Churn was better than expected because they were able to identify high-value customers at risk, and stronger sales of high-end handsets during the past few quarters is contributing improved churn. From the Q&A: How's the economy affecting the number of minutes used?: CFO John Feehan: "We have seen our prepaid usage be fairly stable throughout the first half of the year and right in line...
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  • Earnings: Virgin Mobile Says Economy Hurt Revenues And Profits In Q2

    Virgin Mobile ( NYSE: VM ), the prepaid wireless carrier which agreed to buy Helio from Earthlink ( NSDQ: ELNK ) and SK Telecom ( NYSE: SKM ), announced second-quarter results today, saying its weak performance was driven by changes in consumer spending and a poor economy. In the second quarter, it made a profit of $3.5 million on net service revenues of $291.4 million. Profits fell 50 percent and revenues fell 6 percent compared to the same period a year ago. Dan Schulman, Virgin Mobile's CEO, said in a release: "The operational improvements we have put into place are beginning to pay off. While net revenues declined year over year due to general economic conditions and their resultant impact on consumer budgets, the benefits of our low fixed-cost model are reflected in our strong profitability and record free cash flow of $29.2 million." Release. Call. Highlights from the results: -- Customer losses: The company said it lost 111,273 net customers during the period, recording a 5.6 percent churn (which was below company estimates). In the year ago period, the company only lost 53,424 net customers, but recorded a slightly higher churn at 5.7 percent. -- Total customers: Virgin Mobile had nearly 5 million customers at the end of the period, up 3.4 percent from 4.83 million in Q2 2007. -- ARPU: The company makes an average revenue per user of $19.32 a month, compared to the year ago period, when it was making $20.97 a month. -- New rate plans: The new plans, including a $79.99 unlimited calling plan, should lead to higher ARPU, Schulman said. Sales of the new unlimited plan are exceeding expectations and are among their most profitable offering. Beats most forecasts: The company reported earnings per share of 7 cents on total revenues of $317 million, which is better than analyst expectations of $314 million and 2 cents, reports Barron's . The company's net service revenues of $291.4 million was in line with its own forecast of $285 million to $295...
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  • Virgin Media Preps UK Mobile Broadband On T-Mobile Price Cut

    Virgin Media ( NSDQ: VMED ) will begin offering mobile broadband dongles in the UK in the final calendar quarter. Virgin is late to the UK's booming broadband dongle space but today's earnings reveal the offering comes after it struck an agreement with its MVNO backbone T-Mobile to reduce the wholesale rates it pays for voice and data, retroactive to January and April retrospectively. It will also lower mobile data tariffs accordingly. Virgin, which is also testing 100Mbps cable broadband in England, also committed today to introduce 50Mbps in the second half of the year. More earnings at PCUK … Related O2 UK Latest To Bring Out A Dongle Dongles Rack Up Big Broadband Data Hike For 3 UK Check out the best business jobs in digital media. Go here for paidContent.org Job Board.
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  • Sky Dayton Retires From Earthlink Board; Starting New Company?

    Sky Dayton, the founder of Earthlink ( NSDQ: ELNK ), Boingo and most recently Helio (which was sold for a mere $39 million to Virgin Mobile USA ( NYSE: VM ) in June), has retired from the Earthlink board. Dayton served on the board since 1994, though he hadn;t been involved in day-to-day of the company for a long time now. Said Dayton: "After 14 years, I believe it is the right time for me to return full-time to my entrepreneurial roots." Meaning a new startup. Anyone know what it is? If you do, send us a tip through the anonymous tip box in the left hand column (RSS readers will have to click through). Related Helio Shakes Up Execs; Sky Dayton Moves To Chairman; Sull Upped To CEO Management Shake-Up At Helio, But Sky Dayton To Stick Around Social Media Deals Report: This 199-page report, filled with charts and data, examines the categories, number and size of VC and M&A deal in social media from 2007 through 2008. Visit the ContentNext Reports page
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  • Mobile Content Bits: CBC/Radio-Canada; Orange Music Show; 7-Eleven

    CBC/Radio-Canada Mobilize: Canadian national public broadcaster CBC/Radio Canada is launching ad-supported mobile sites which will offer real-time access to news, sports, and entertainment content. The broadcaster has 29 services on radio, TV, internet, satellite radio, digital audio and record and music distribution services, and currently has WAP and SMS offerings. The new mobile web pages will be run by Quattro. ( MediaCaster ) Orange Music Show: Orange UK is planning a weekly 6-minute clip dubbed The Music Show which will "include exclusive music news, artist interviews, album reviews and monthly live sessions". It's spurred by the success of a daily show trialed at the Glastonbury Festival, reports C21 Media . 7-Eleven MVNO In Singapore: 7-Eleven has expanded its MVNO to Singapore, after what must have been a successful start in the US and Canada. "The company will launch (the pre-paid) 7-Connect in 400 7-Eleven stores in Singapore. 7-Eleven officials said the 7-Connect program will feature free nights and weekends, and uses the 3G network services of M1, a Singapore mobile service provider," reports RCR Wireless . It seems to be following the most common road to MVNO success—offering cheap services. And of course it doesn't have any distribution problems. Our mobile application for Blackberry and other Smartphones brings you the latest headlines when you're on the go. Go here to download .
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  • Virgin Mobile Bares Too Much In Lasest Quirky Stunt

    "Virgin Mobile USA ( NYSE: VM ) definitely walks to its own, very hip drumbeat," reports USA Today in a story today about how the pre-paid service provider "treads a quirky path to success." But oddly enough, the story doesn't mention its latest headline-catching stunt. The carrier is participating in an initiative to support organizations that will give brand new clothes to homeless kids. To generate more interest, Virgin launched Strip2Clothe , which asked people to post striptease videos of themselves online, and for every five times a video was viewed, Virgin would donate one piece of clothing. For the campaign, Virgin was working with the National Network For Youth (NN4Y), a D.C.-based group representing 150 homeless organizations, according to WirelessWeek . The striptease, however, got more than viewers aroused. Catholic Charities reportedly said that it was never consulted about the stunt and has called the campaign "distasteful," "inappropriate" and "exploitative." The organization's names have been taken off the site, and NN4Y has reportedly said the campaign has been "limited and it's being re-evaluated." The videos, however, can still be found at strip2clothe.com , where the tagline is: "You take off yours, we donate ours." So far, there has been 70,831 donations, according to the site's counter. But before you get too excited, yes, Virgin does have some standards: "to be clear – while the moniker of our effort is Strip2Clothe and we want you to have fun with it — keep it clean, too. Because youth homelessness is anything but a joke." Check out the best business jobs in digital media. Go here for paidContent.org Job Board.
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  • Industry Moves: Former Virgin And NBC Exec Turns VC To Search For Mobile Avertising Opportunities

    Valhalla Partners , a Vienna, Va.-based venture firm with $440 million under management, announced today that it has hired Saj Cherian, a former executive from Virgin Mobile USA ( NYSE: VM ) and NBC Universal ( NYSE: GE ), as Principal to expand its focus on mobile investments. To date, JumpTap, the mobile search and advertising company, is Valhalla's one mobile investment. I talked with Cherian today to get a sense of what he was looking for in his new role, and how he sees the mobile-content industry shaping up. At NBC Universal, he worked on business development and wireless strategy, where he focused on monetizing NBC's mobile properties through advertising, including banners, SMS, and some in-game advertising and video. At Virgin Mobile, he was director of new data services, where he worked on the prepaid carrier's mobile advertising strategy, which included launching its Sugar Mama campaign that allows people to watch ads in return for free voice minutes. Excerpts from the interview: The state of the mobile-content and advertising industry: "Consumers are tapped out on how much they are willing to spend in mobile, and then there are a lot of unlimited options that are capping their spend. The consumer wallet is tapped out, so you really have to dig into someone else's wallet and tap into the advertiser. That's an important area for the wireless industry to be focused on, but it's clearly not playing out as quickly as a lot of folks would like, and that's because there's too much friction in the marketplace. It's too hard to put advertising dollars to work." On Sugar Mama's roots: "We started with our customers, and we engaged them in a dialogue. Our customers are very opinionated, which is good, so we asked them, 'how do you want to engage in brands?' They were pretty clear. One message we got was that they've been shouted to by brands my whole life, so it's got to be opt-in. Another was that...
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  • Virgin-Helio: Interview: VMUSA's CEO Dan Schulman: Merger A "Transformative Deal For The Company."

    Virgin Mobile USA ( NYSE: VM ) today announced that they will be acquiring Los Angeles-based Helio, a competitor backed by SK Telecom ( NYSE: SKM ) and EarthLink, for $39 million. The deal is complicated because it also includes cash and debt infusions by SK Telecom and the Virgin Group, and a favorable new network deal with Sprint ( NYSE: S ). Following the announcement, I interviewed CEO Dan Schulman, who called the merger "a transformative deal for the company." Here are some excerpts: Many MVNOs have not been successful in the U.S. Together, it seems like you will have a fighting chance. "It's a fantastic transaction for three reasons: I think it greatly enhances our growth potential with the new capabilities we are getting; it provides us with significantly more scale and a number of cost benefits, and finally it greatly improves our financial strength and financial structure. When you pull all of these things together, it was a transformative deal for the company. You say this deal wasn't to compete with mainstream carriers, why not? "This is much more about an evolution of our product strategy, we are staying focused on youth market. The youth market continues to evolve as mobile becomes more central in their lives and everything they are doing. When you think about about when we entered the market six years ago, we were offered basic prepaid service with two handsets, we've evolved as we've scaled and as our target market evolved. Two years ago, we introduced hybrid offers, which are monthly plans without a contract, and now over 30 percent of base is on monthly plans. This was the next logical extension for us. We are finding in conversations with our retailers, we are beginning to see more movement up market to more advanced handsets, and with those advanced handsets, come more data services capabilities, and we wanted to make sure we could offer a choice to service our customers through the entire life cycle. That was the...
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  • Virgin-Helio: Execs Explain Tie-Up; Confirms Helio Store Closures And Other Reductions

    Virgin Mobile ( NYSE: VM ) hosted a conference call this morning to explain the acquisition of Helio, which will cost them $39 million, and will gain them a fresh $50 million of investments from Virgin Group and SK Telecom ( NYSE: SKM ) at a price of $8.50 per share. Release. Virgin's CEO Dan Schulman thoughts: "This accelerates our ability to offer a full suite of products to our existing base of 5 million customers...We worked hard to put together a transaction that benefits all those involved, and we are delighted to gain an important strategic partner in SK Telecom, one of the premier telecom companies in the world. The acquisition of Helio rapidly advances the products we can offer and adds a migration path to our most valuable customers, and let's us enter the post-paid business...This is a natural evolution of our product strategy and builds upon our expansion of hybrid and prepaid services. We intend to integrate Helio's functionality into our new handsets, support prepaid, postpaid and hybrid services, and we'll have a greatly improved capital structure and substantially more liquidity." Quick close: Expected in the third quarter, in the meantime Helio and SK Telecom will conduct cost-saving measures. The deal: Acquiring 170,000 customers, who are generating $80 of ARPU, an inventory of 80,000 handsets, and Helio's state of the art customer technology platform that would cost $25 million and 12 months to build on their own. Concurrent with the acquisition, they are getting $25 million from both Virgin and SK Telecom, which will let them pay down debt. "It significantly improves our capital structure." The company will now have $135 million in revolving debt, up from $75 million before. This has allowed us to obtain more favorable network rates from Sprint ( NYSE: S ). We've restructured them so they aren't tied to Sprint's costs, but tied to how much volume we have, which will represent a 8 percent discount...
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  • SK Telecom-Helio-Virgin Mobile Deal Done; Helio To Be Injected Into VMUSA: Report

    So reports FT this evening , citing sources. We first broke the news on the deal talks last month, and after hiccups in valuation and other issues, the deal has been signed in principle and that an announcement could be made as early as this week. The deal will include Helio, now majority owned by SK Telecom ( NYSE: SKM ), injected into Virgin Mobile USA ( NYSE: VM ), and better-recognised Virgin brand will be retained. VMUS, which did its IPO on NYSE last October, will issue new shares, leaving SK Telecom holding close to 20 per cent of the equity of the enlarged business, which will be worth about $50 million, the story says. SKT will also invest a nominal amount of cash in VMUSA. Virgin has about 5.1 million mobile customers, all of whom are on pay-as-you-go deals...Helio has about 200K, all post-paid. Will this deal make any material difference to VMUSA's chances of surviving in the long term? It will certainly give it some cash, and the Korean expertise in handset and advanced mobile service, for whatever that is worth. It will also give VM an entry into higher end handsets, higher ARPU customers, and better UI that comes with Helio, if they decide to use that. Distribution and still-relatively smaller scale remains an issue… Possibly the best analysis and rationale of a merger comes from one of our commenters, who posted this in response to a previous post on Helio store closures: "1. Savings in operations by merging overlapping areas such as IT. This can reduce Helio's current operating costs by as much as 40%. 2. By pooling the minutes, Helio saves on Virgin Mobile's current lower wholesale rates. This could result in savings for cost of goods sold by nearly 15%. 3. By rolling out Helio's exclusive services to the Virgin community it increases margins for the business without any additional investments. Imagine 5 million people now being able to use exclusive services such as Answer Rings, Google ( NSDQ: GOOG ) Maps, Buddy Beacon, Tell Me...
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