This has been a big week for Virgin Mobile with announcing their unlimited calling plans and now its purchase of Helio for $39 million. Helio’s 170,000 customers will be merged into Virgin’s network.
Virgin has offered only prepaid and hybrid plans in the past and with this purchase of Helio will begin their entrance into the postpaid market. Virgin is claiming that buying Helio is saving them 12 months worth of effort that they would have had to expend in order to offer postpaid contracts to customers. Also, merging with Helio will allow Virgin to pay lower rates to host network Sprint.
Before the deal closes Helio is making significant cost reduction leading to a lot of lost jobs. But, its looking like Virgin is intent on keeping Helio’s services going and will use the merger as a step into the high-end handset market. For more information check out Phone Magazine.