Sky heads skyward: Helio CEO now chairman

Urban, youth-oriented MVNO Helio L.L.C. is racking up “record growth,” the company said yesterday in announcing that founder Sky Dayton will leave the CEO post to become chairman.
Dayton replaces current chairman Jinwoo So, president of global business at SK Telecom. Helio is a joint venture between EarthLink Inc. and SK Telecom, though EarthLink has quit investing in the firm.
Helio noted that Dayton made a similar move when EarthLink, which he founded, was two years old. Wonhee Sull, formerly Helio’s president and COO, will step into the role of CEO.
“The two of us will continue to define Helio’s direction and future,” Dayton said in a prepared statement yesterday.
“Helio has succeeded where other post-paid MVNOs have not because of our differentiated message, products and services,” Sull added.
The company proffered that its “nearly 200,000” subscribers produce usage statistics that “exceed many industry averages,” including the rate of its members text messaging (more than 500 per member per month), the rate of members’ IMing, the percentage of members who access the Web on their mobile device, and those who upload photos from their device to the Web.
But many analysts and commentators are more concerned with the company’s financial condition and whether its “record growth” will produce the revenue and profit necessary to sustain the company. The MVNO had forecast between 200,000 and 250,000 subscribers by the end of 2007, well above the “nearly 200,000” it claimed yesterday. Helio also said yesterday that its subscribers’ ARPU is greater than $85 per month, well above the industry average of about $50. But Helio posted a net loss of $92.3 million in the third quarter of 2007 and a loss of $83.8 million in the second quarter. Helio reportedly cut about 100 jobs last summer from its sales force, from a base of about 700, and re-focused its attention on major urban markets rather than nationwide. The losses proved to be a drag on EarthLink’s own profits as well.
Those interested in more insight into Helio’s financial progress can tune into EarthLink’s fourth-quarter earnings on Feb. 7.
SK Telecom agreed late last year to continue funding the MVNO, while EarthLink has capped its investment. Helio launched in May 2006 by leasing network capacity from Sprint Nextel Corp.