Helio’s financial results: When Virgin Mobile completed the purchase of Helio, it had 170,000 subscribers, but they lost 5,000 during the third-quarter, which negatively affected the company’s net customer additions. However, Helio, which typically has higher paying post-paid customers, had a positive impact on ARPU (average revenue per user), which grew to $20.19 in Q3. Helio also contributed about $800,000 of EBITDA in Q3, but that was after Virgin Mobile rationalized costs, which included closing all of Helio’s stores and kiosks, and reducing headcount from 600 to 190. Now Helio’s customers will be profitable over the long-term.

Helio’s data services team is driving Virgin Mobile’s innovation: In addition to providing Virgin Mobile a higher-end postpaid product that they can offer to customers, it is also driving the company’s innovation going forward. Schulman: “Our strategy was take this fantastic platform that SK and Helio built and combine that with our strong distribution partnerships and our operational discipline.” Helio’s data service team is now Virgin Mobile’s team. “We are keeping a lot of it because a lot of it is cutting edge. You’ll see some new stuff that is coming out, and we’ve kept the full team on data application and technology side of the business to support it. We have a whole pipeline of new services…I don’t want to give any of them away now, but there’s a couple of them that they’ve been working on and had in the works that I’m quite excited about, and now we are getting them out to market sooner than they would have.”

The economy will impact the migration from low-end handsets to mid-tier phones: Schulman: “We’ve seen a migration to the mid-tier and higher-tier phones. It used to be that 75 percent to 80 percent of our gross ads were on low end phones, but that’s dropped to under 50 percent….But you are also going to see tension in the market right now. Because of the severe environment that consumers are facing, they may need to buy less expensive phones now. I think we are only entering into a deep and long recession, and it may have implications for purchasing going forward.”