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Virgin Mobile USA ( NYSE: VM ) said today it's laying off about 45 employees in its New Jersey and California offices, which represents about 10 percent of the overall workforce. It now will have about 400 employees on payroll. In a memo sent to employees today, Virgin's CEO Dan Schulman explained that the company was able to identify places where they were able to cut because of the company's transition of IT services to IBM and through the acquisition of Helio. The Warren, New Jersey-based company reported third-quarter financial results, easily beating expectations. Schulman: "Our intent is to expand our investment in both our prepaid and new postpaid business and, in order to do so profitably, we must continue to identify opportunities to reduce operating costs across all areas...Virgin Mobile USA is well positioned to weather these tough times and build our business in 2009." Our streamlined mobile application for the BlackBerry and other smart devices brings you the latest headlines quickly on the go. Click here to download .

Virgin Mobile USA ( NYSE: VM ) reported its Q3 financial results today, which is the first period that includes results from Helio, the struggling MVNO that the company bought from EarthLink and SK Telecom ( NYSE: SKM ) in August. The company easily beat its expectations in the quarter, by reporting net service revenues of $305 million, adjusted EBITDA of $27.5 million and a net customer loss of 3,267 subscribers. The company had been forecasting net service revenues of up to $295 million, adjusted EBITDA of up to $24 million, and net adds, ranging between a 20,000 loss and a 20,000 gain. VMUSA's CEO Dan Schulman said: "Our business performed well in the third quarter. We were able to increase gross customer additions by 8 percent year over year, while our continued operational discipline allowed us to once again overperform in Adjusted EBITDA, growing by 61 percent versus Q3 2007 and improving our Adjusted EBITDA margin by 330 basis points." In after hours trading, the company's stock jumped 24 cents or 25 percent to $1.20 a share. Release . Earnings Call . Other highlights: -- Economic impacts: VMUSA's net service revenue for the first nine months of 2008 was $900.2 million, dropping 4 percent from $933.5 million in the same period in 2007. Net service revenue for Q3 and the first nine months were impacted by the economy, as well as usage trends toward lower cost alternatives such as text messaging. -- Net income: Virgin Mobile USA's net income for the quarter was $4.1 million, compared to a net loss of $7.4 million for the year-ago period. Net income for Q3 included minority interest expense of $4.4 million, which did not exist in the comparable period in 2007. -- ARPU and Churn: At the end of Q3, the company had 5.2 million customers, a 6 percent increase over the year-ago period reflecting the purchase of Helio. Churn in Q3 was 5.5 percent, compared with 4.9 percent in the same period in 2007. Average revenue per user (ARPU) in Q3 was ...

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...

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...

Virgin Mobile USA ( NYSE: VM ), the MVNO which just reported its Q1 earnings earlier this week, is in talks with the much smaller and troubled MVNO Helio , we have learned, even as other PE and strategic players are still circling both the companies. Helio is now controlled by SK Telecom ( NYSE: SKM ), after Earthlink ( NSDQ: ELNK ) stopped making further investments, and has been looking at options to either exit or grow. For VMUSA, as we have mentioned, some PE players have been looking at investing in the company or buying it outright, and even if the VMUSA-Helio deal comes through, the two could use some extra cash. Under one scenario that has been discussed, SK Telecom would buy out VMUSA and do a cash infusion; then Virgin Mobile would buy Helio in an all-stock transaction. Both of the MVNOs run on the Sprint ( NYSE: S ) network, so at least both run on the same network. But the merger of two won't solve any problems of scale or distribution for either of them, but at least would give the bigger partner VMUSA a high powered post-paid plan, and better handsets and phone UI. SKT, South Korea's largest mobile operator, has been looking to expand its operations in U.S. Cyworld USA, SKT's social networking subsidiary here, hasn't done as well as it expected, and we know Helio's troubles. Previous reports have also said that SKT was looking at buying the troubled operator SprintNextel, along with PE firm Providence Equity. Sprint rejected the $5 billion bid. As for VMUSA, when we asked CEO Dan Schulman to comment on rumors, he told us this earlier in the week: "We don't comment on any rumors out there, but we have said that we believe that there are opportunities for us in terms of non-organic growth, such as another MVNO , or capability set that we might be able to avail ourselves of...Certainly there are a lot of opportunities that we see, and we think some of them are intriguing for us, but it's a matter of what makes the most sense...

For some unknown reason, Virgin Mobile USA's ( NYSE: VM ) stock is trading as much as 34 percent above yesterday's close today, prompting the New York Stock Exchange to ask the company to issue a public statement on whether there have been any developments that would explain the jump, according to the AP . But the company declined to comment, saying it does not talk about unusual market activity. Virgin Mobile's shares rose as much as $1.26, or 34 percent, to $4.97 in early morning trading (perhaps the formal inquiry scared off investors because now the stock is up about only 5 percent). Trading volume was also higher than normal at about 932,000, which is above the daily average of 538,000 shares. In addition to today's rally, Barron's noted that the stock has rallied 103 percent in the last six trading sessions. We'll see if anything is up on Monday when the company reports first-quarter earnings. Last quarter, the company lowered its outlook, saying it was being affected by the slowdown in the economy. In reaction, we reported that the company was thinking about shedding some staff to save money. Barron's said Wall Street is looking for $315.3 million in revenue and profits of 9 cents a share. The company expects net service revenue of up to $303 million and earnings of up to 4 cents a share. Related Virgin Mobile: 100 Posts—One-Fourth The Staff—Could Be Cut, Or None At All Virgin Mobile USA Shares Fall As Much As 54 Percent On Disappointing Earnings