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SK Telecom: like a Virgin? |
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Wednesday, 14 May 2008 |
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Korea-based giant may combine its US business with Virgin Mobile USA, amid concern over Sprint-Nextel’s fate.
Talks are underway between Virgin Mobile USA and SK Telecom, majority shareholder in the ‘Helio’ mobile business in the US. Both companies use the Sprint-Nextel network platform for their US MVNO operations, with Sprint in fact holding a minority stake in publicly-listed Virgin Mobile USA.
In today’s statement, Virgin (with a market cap of around US$200mn) said that “the Company is in preliminary discussions with SK Telecom to explore possible strategic opportunities. Virgin Mobile USA said these discussions are in early stages, and there are no assurances that any transaction will result. Virgin Mobile USA will have no further comment unless a definitive agreement is reached.”
There’s recent concern at the apparent underperformance of Helio, Virgin Mobile and Sprint-Nextel itself in the US market. The latter pair have seen their shares falling sharply in recent months, while SKT’s partner in Helio, Earthlink, has also been sagging.
The prospect of any deal may be overshadowed by speculation over Sprint-Nextel’s own future. Late last year, SKT sought a direct stake in Sprint, but was rebuffed. Recently, German-owned T-Mobile has been linked with a bid for the company.
Jim Chalmers
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