All throughout the Ocean 2’s development cycle, pictures of it kept popping up in a silver and black motif. When it actually launched, however, everything silver had been turned red. The color change made sense, with the Helio-brand now under the parental guidance of Virgin Mobile (who’s primary color is red) – but it was one of the things we didn’t like. We said in our review that we hoped a black version would follow, as various hearsay had lead us to believe.

Looks like it is indeed. This render of the Ocean 2 decked out with a black bezel was hiding in a Helio page intended for Korean-American customers page, and it appears it might even be for sale already for that market. It might mean a trip to a Korea-town dealer or calling up a Helio CS rep and asking real nicely, but if you’re waiting for a slightly less vibrant Ocean 2, you might be able to get one now.

[Thanks David!]

Since the day the original Helio Ocean hit the shelves, rumors were abound that a followup was in the works. 2 years have since passed, countless rumors and leaks have come and gone, and the company that birthed the original has since been acquired – but it’s finally here. Has the wait been worth it?

After months of rumors and undercover imagery, the Virgin Mobile Helio Ocean 2 is finally just weeks away from hitting the shelves. Don’t want to wait to experience the rush of cracking open the box? Fear not, my friends – we’ve got what you’re looking for. We’ve peeled it apart, piece by piece, and snapped images all along the way. Ready for the unboxing of the Helio Ocean 2? Click on for the gallery.

After word got out that Britney Spears’ next tour would be sponsored by Virgin Mobile and the Helio Ocean 2, the estimated Ocean 2 launch date finally found it’s first deadline: March 3rd, the first day of the tour. We can now confirm that the Helio Ocean 2 will be coming over 3 weeks earlier, launching on Helio.com on February 12.

The Specs:

• 2.6″ QVGA Screen
• Optical Sensor for touchpad-like navigation
• Dual slider (One QWERTY, one number pad), a la the original ocean
• 5 hours of talk time, 10 days of standby
• 2GB internal storage, microSD support
• 2MP Camera w/ video support, night shot, and geotagging
• Full HTML browser with tabbed browsing
• Upgraded Ultimate Inbox: Threaded text messages, Google Talk
• Access to all the Helio services: Connect, Buddy Beacon, WHERE, HelioUP

Contrary to what we’ve seen in previously leaked images, the Ocean 2 will be launching in the “red limited edition” color scheme you see above, with other colors said to be coming “later in the year”.

Long before Virgin Mobile acquired Helio, we started hearing whispers that the Samsung F400 was destined for the carrier’s lineup. With its vertically dual-sliding design featuring a number pad on one end and dual speakers on the other, it would have been a pretty snazzy little handset for music fans on everyone’s favorite MVNO. Don’t expect to expect to see this one hit the shelves anytime soon, though.

Read the rest of this entry at MobileCrunch »

(Thanks to Virgin Mobile for passing the $50 dollar gift cards our way!)

In the series of $50 gift card giveaways we’ve had so far, this is our third. Well, actually, if you count the one we gave away on the MobileCrunch Twitter feed last night, it’s our fourth. Congrats to Chance (Contest 1), Zulay (Contest 2), and Bernardo (Contest 3, via Twitter) on walking away with 50 greenbacks just in time for Christmas. Haven’t won yet? Don’t sweat it. We’re not even a third of the way done yet.

Click on over to MobileCrunch to find out how to enter >>

Long story short, Virgin Mobile sent us an envelope full of $50 dollar gift cards, and we’re passing them on to our readers at a rate of one or two per day. (If you really want the whole back story, here you go.) The only catch is that they expire at the end of 2008, so if you nab one you’ll have to spend it quick.

This is the second card we’ve given away so far. Find out how to win it at MobileCrunch >>

When Virgin Mobile acquired Helio, they also acquired a fat stack of 50 dollar Prepaid AmEx cards that were originally intended for Helio promotions. I assume it was kind of like finding a $20 in a pair of pants you haven’t worn in a long time, except it was a whole bunch of pieces of plastic worth $50 each. Rather than filling the Virgin Mobile offices with PS3s, they figured our readers might be able to use some of them to make Christmas just a wee bit more exciting. The only catch? They expire at the end of 2008, so you’ll have to find something to spend them on quick (as if that’ll be difficult.)

Find out how to win at MobileCrunch >>

When I clicked my way through to the image attached to this morning’s Helio Connect press announcement, I couldn’t help but laugh. Not because I find social news site aggregators inherently funny, mind you – but because there’s a little Easter Egg hidden inside and, oddly enough, it’s somewhat related to yours truly.

If you haven’t spotted it by now, take a glance at the second item on the list. “Secret handset”, it reads. Now, before you get too excited that you’re getting a sneak peak at Helio’s next big thing, read on after the jump for the history of this image.

Read the rest of this post at MobileCrunch >>

Now that Virgin Mobile has finished the process of gobbling up Helio, they’ve started launching devices which utilize some of the partnerships the buyout brought to the table. The first one out the door is the Virgin Mobile Shuttle, which purportedly totes Buddy Beacon, a locational application that began its life on Helio handsets. I haven’t actually found it (or any other hints of Helio) on the handset, but I’ll keep an eye out and let you know whats up in the coming review.

Though there’s not all the much box to be seen, we’ve gone ahead and stripped it down and documented the process in photos.

One click makes them bigger – click that second shot for the high res image:

In yesterday’s press release concerning the relaunching of Helio, there was a brief mention of a new handset dubbed the Shuttle but no details were included. Today we find out that the phone is really a 3G Virgin Mobile branded slider loaded with 1.3 megapixel camera, Facebook app, stereo Bluetooth and Helio’s software suite, including Buddy Beacon. The new phone could be yours for only $99 if Virgin Mobile is the cell phone service you rock.

Helio always had pimp-ass mobile phones and it was kind of sad watching them slowly die, still clenching some of the best handsets in the States. Virgin Mobile picked up the struggling service provider a few months ago and today, launched the new brand.

Today, Virgin Mobile USA unveiled its new branding message to highlight the acquisition: “Helio By Virgin Mobile: Plan To Have It All.”

Right out of the gate, Helio by Virgin Mobile (got to use the right name) is launching a new phone dubbed the Shuttle. It’s just to bad that the press release didn’t announce any more info ’bout the handset including price or manufacturer. Also, the $80 A La Carte plan is bumping up from 1500 minutes to unlimited which is available to both current and future subscribers. Hopefully more good is to come from the Virgin acquisition.

Earlier this week, rumors were circulating that SK Telecom was in takeover talks to acquire Sprint. Though The New York Times and The Wall Street Journal reported sources saying that the two were in preliminary partnership talks, which included the idea of SK Telecom making a minority investment in Sprint.

Photo courtesy of Bloomberg.

For the immediate future, VM isn’t deviating from its pay-as-you-go business model. Just last month they announced their new Totally Unlimited plan with no annual contract or roaming charges starting from $79.99 per month.

Update after the jump

Just a few days ago the Financial Times reported that Virgin Mobile would absorb the Helio brand. As such, all Helio stores will shut their doors although we had heard the NYC store would stay open. It’s unclear what will happen to Helio’s employees, but it’s safe to say that most of them will be let go. The acquisition won’t go through until Q3, so the remaining Helio employees better start looking for a new gig ASAP if they haven’t already.

So what exactly does the merger mean for customers of Helio who have grown to love the hardware and features that Helio is best known for? Well, Virgin Mobile will be keeping all of those goodies in place. If you’ve seen any VM devices, you know they stink. VM is relatively boring and absorbing the technology Helio is best known for will certainly boost the MVNO’s status and appeal to a broader audience. That means future VM devices will include apps such as Google Maps with GPS, YouTube and MySpace… all of which Helio brought to the table before other carriers.

What about the Ocean 2? If you haven’t already figured it out by now, the Ocean 2 has been delayed over the last few months because of merger talks. It’s unclear when the device will actually launch, but it hasn’t been scrapped. Whether the device needs to go back to manufacturing to adjust the backlit Helio logo is unclear. VM just might release the device with some tag line like, “Virgin powered by Helio” to save money. But fear not, the Ocean 2 is still coming. The branding is unknown, though.

While I hate to see Helio dissolve, this is great for both brands. VM knows how to make money while Helio knows how to create technology that works and is appealing. It’s a win-win situation for the customers, but not so much for Helio employees. Let’s just hope VM doesn’t screw it up.

Q&A from Helio about the merger

HELIO and Virgin Mobile USA are teaming up to combine our strengths and deliver a better mobile experience. On June 27th Virgin Mobile USA announced that it had signed an agreement to acquire HELIO.

HELIO gains access to Virgin Mobile USA’s extensive distribution network and broad customer base, while Virgin Mobile USA gains access to HELIO’s exclusive, high-end devices and premium services. Both companies look forward to coming together to bring exciting prepaid and postpaid opportunities to their customers.
Q: What does this mean for current HELIO members? Can I still use my HELIO device, while keeping my HELIO service plan and number?

A: Current service plans will continue without interruption – it will be business as usual. HELIO members are at the center of this transaction and we’ll continue to bring them the innovative mobile services they’ve come to expect.
Q: Can new members still sign up for HELIO service?

A: Absolutely. HELIO will continue to offer exclusive, high-end devices and our innovative All-In plans.
Q: Will the HELIO brand be retained, or will everything migrate to Virgin Mobile USA?

A: Over time, we expect that all aspects of the customer experience will be integrated under the Virgin Mobile USA brand. Integration of the direct sales channel will begin immediately, and we expect that existing HELIO products and services will soon be offered through the Virgin Mobile USA website at www.virginmobileusa.com.
Q: So what’s next?

A: We’re excited by the possibilities our new, combined team offers. We have some big ideas, but as you can imagine, a little bit of housekeeping is in order before we share them. Stay tuned!
Q: Does this affect my current contract with HELIO in any way? When Virgin Mobile USA does acquire HELIO, can I end my current contract without paying an early termination fee (ETF)?

A: HELIO contracts remain in effect and unchanged by this transaction. HELIO members who wish to end their contract early will still be subject to an early termination fee (ETF).

The call starts at 11am eastern, 8am Pacific. Listen in live as Virgin and Helio describe their new partnership.

WARREN, N.J., June 27, 2008 – Virgin Mobile USA, Inc. (NYSE: VM), a leading national provider of wireless communications services, today announced that it has entered into an agreement to acquire Helio, a joint venture between SK Telecom and EarthLink, Inc. (Nasdaq: ELNK) providing highly advanced postpaid products and services with unique user applications. Under the terms of the agreement, Virgin Mobile USA will acquire Helio from SK Telecom and EarthLink for limited partnership units equivalent to 13 million shares of Virgin Mobile USA class A common stock, with a value of $39 million based on the closing price of Virgin Mobile USA’s class A shares on June 26, 2008.

The transaction is expected to close in the third quarter of 2008, subject to receiving regulatory approvals and satisfaction of other customary closing conditions.

Dan Schulman, Chief Executive Officer, Virgin Mobile USA, said, ”We believe that the acquisition of Helio and the related strategic investments by SK Telecom and Virgin Group are of enormous benefit to our business, both financially and strategically. The reduction of our long-term debt and the increase to our revolver will realign our capital structure, providing us with greater liquidity and increased flexibility to grow our business. At the same time, we will acquire an asset which will add to our scale, allowing us to reduce our network costs and assure that Helio’s customers are immediately profitable when brought on to our cost structure. We expect the combined elements of this deal will drive increased Adjusted EBITDA and free cash flow.”

Accelerating Virgin Mobile USA’s Growth
Upon closing, this transaction is expected to achieve a number of important steps for Virgin Mobile USA. Strategically, the acquisition of Helio allows Virgin Mobile USA to add a set of unique and differentiated data applications to its suite of products and services, greatly enhancing its offer across its customer base. Entry into the postpaid market will also give the Company access to approximately 140 million prospective customers1. Including reductions in Virgin Mobile USA’s network rates and an improved capital structure, this transaction is expected to be accretive to Adjusted EBITDA in 2008, excluding non-recurring transition costs, and to be accretive to Adjusted EBITDA and free cash flow in 2009.

With the acquisition of Helio, Virgin Mobile USA will gain an established and highly advanced postpaid billing and customer care platform. In addition, Helio has approximately 170,000 existing subscribers with an ARPU of approximately $80 and a handset inventory of approximately 85,000 units with a book value of approximately $17 million2. Acquiring Helio’s customers and expanding its offer portfolio is expected to increase Virgin Mobile USA’s volume of minutes and drive down the Company’s cost per minute under an amendment to its PCS Services agreement with Sprint (NYSE: S).

Schulman added, “This strategic acquisition integrates Virgin Mobile USA’s brand recognition, scale and extensive distribution with Helio’s accomplishments in advanced handset and content offerings. It provides us with a firm foundation to create a truly holistic, leading-edge product suite to service all of our existing and prospective customers. With about 20% of our disconnects currently going to postpaid products, we believe this new platform will be a powerful retention tool as we offer a unique and desirable postpaid alternative to our customers.”

Helio has been at the forefront in developing leading data services, in partnership with You Tube, Google and MySpace. Virgin Mobile USA will use this unique intellectual property to strengthen its competitive position in the prepaid, hybrid and postpaid markets while moving its handset lineup upmarket. Consequently, the Company expects to drive incremental growth in data revenues in the future.

Source: Nielsen Mobile, 2007. Total registered postpaid lines of 223 million; 60% spend less than $70 per month.
Helio Balance Sheet as of June 16, 2008. Fair value may be materially different upon fair value analysis post-close.
Strategic Investments Made at $8.50 per Share
Virgin Mobile USA also announced today that Virgin Group and SK Telecom will each invest $25 million of equity capital in the Company, creating an aggregate investment of $50 million. The investments will take the form of mandatory convertible preferred stock, convertible to Class A common stock at $8.50 per share, pending shareholder approval. The preferred shares will carry a four year maturity and a 6% annual dividend. Upon approval of Virgin Mobile USA’s shareholders, the preferred stock will convert into Class A common shares when the shares reach the conversion price or upon maturity.

Through its holding of limited partnership units and preferred stock, SK Telecom is expected to own the equivalent of approximately 17% of Virgin Mobile USA, and will take two seats on Virgin Mobile USA’s Board of Directors.

Jin Woo So, President, Global Business of SK Telecom said, “This transaction and our long-term, strategic investment in Virgin Mobile USA continue SKT’s strong momentum in the U.S. market, and will allow Helio and Virgin Mobile USA to realize significant synergies and strategic benefits. Virgin Mobile’s scale, strong brand power and expertise in prepaid with Helio’s leading technology, innovative services and experience in postpaid will together form a powerful new platform that will bring new value and flexibility to customers. We believe the strength of the business model will serve to enhance the value we built at Helio, and we look forward to a long-term partnership.”

Improved Capital Structure
Virgin Mobile USA intends to use the proceeds from these strategic investments by SK Telecom and Virgin Group to pay down a portion of its existing senior secured loan. SK Telecom and Virgin Group have also agreed to provide an additional $35 million and $25 million, respectively, to increase Virgin Mobile USA’s existing revolving debt facility, which will support the Company’s ongoing strategic growth. The additional revolver is expected to be used in part to fund debt and net working capital liabilities associated with restructuring and improving the efficiency of Helio’s ongoing operating costs, up to a maximum of $25 million. Following this additional investment, Virgin Mobile USA’s total revolving debt facility is expected to be $135 million. At close, approximately $15 million of the revolver is expected to be drawn to repay Helio’s outstanding debt and to fund one-time integration costs and transaction fees, resulting in an estimated undrawn balance of $75 million at close. The Company expects to use the revolver to fund up to an additional $10 million in restructuring and integration costs over the next 12 months, and for working capital as needed. Virgin Mobile USA intends to pay down $50 million of its existing senior secured loan upon close of the deal, which was approximately $269 million on March 31, 2008. Under the terms of its amended credit agreement, the margin on the outstanding balance of the senior secured loan will increase 100 basis points to LIBOR+550.

John Feehan, Chief Financial Officer of Virgin Mobile USA, said, “The strategic investments made by Virgin Group and SK Telecom will significantly improve the capital structure of our business by increasing our liquidity, and allow us to pay down $50 million of our senior secured loan. Combined with the Adjusted EBITDA accretion we anticipate, this reduction in debt will substantially increase our covenant headroom, while reducing our debt service on the senior secured loan by a net 17.7%. The improved capital structure, with the incremental cash flow we expect to generate, will provide us with a great deal more flexibility in funding the growth of the business and in servicing our debt.”

Operational Synergies and Improved Network Rates
Under the terms of the agreement, Helio will make significant cost reductions before the expected close of the transaction. Also after close, Virgin Mobile USA expects to make further improvements to Helio’s operating and customer acquisition expenses, through handset volume discounts and improving Virgin Mobile USA’s network rates through an amendment to its PCS Services agreement. In aggregate, Virgin Mobile USA anticipates Helio’s SG&A expense to be reduced by more than 70% by the end of 2008, with the majority of savings coming from the rationalization of distribution and headcount reductions. Virgin Mobile USA also expects to see significant cost savings as it centralizes the Helio offerings under the Virgin Mobile brand.

Virgin Mobile USA has also reached an agreement with Sprint to revise the terms of its existing network contract, and expects to achieve a minimum of an 8% reduction in its effective cost per minute in 2009, with further reductions over the next three years. Under the new amendment to the PCS Services agreement, Virgin Mobile USA’s cost per minute is tied directly to the volume of network traffic it generates, and will no longer be dependent on Sprint’s network costs. Virgin Mobile USA will achieve reductions to its per minute rate upon achieving certain targets for the volume of minutes used by its customers. This new volume discount structure allows Virgin Mobile USA additional flexibility in pricing, while substantially reducing the Company’s third-party risk. Additionally, effective July 1, 2008, Sprint will provide a $2.50 network usage credit to Virgin Mobile USA for each gross customer addition, with a cap at $10 million.

Top-Tier Customer Platform
SK Telecom and Helio have built a proprietary postpaid customer platform, with highly advanced web architecture. This platform features a broad range of fully integrated functionality for postpaid, prepaid and hybrid customer support, including real-time rating engine, billing platform, and credit review. It will allow Virgin Mobile USA to immediately enter the postpaid market, implementation for which on a stand-alone basis would require a minimum of 12 months.

Greatly Expanded Handset and Data Offerings
Helio has built its reputation by providing its approximately 170,000 customers with highly sophisticated data services, and Virgin Mobile USA will leverage these advanced applications along with Helio’s established postpaid platform, social networking content and feature-rich handsets to provide its customers with the latest in wireless products and services. This acquisition will allow Virgin Mobile USA to provide current and future customers with unique user applications on Sprint’s high speed EV-DO network, including Google maps with GPS, as well as integrated You Tube and MySpace applications.

Let’s be honest. We’ve seen this coming for more than a month now and the Financial Times is reporting that VM and Helio could announce sometime this week that the two MVNOs will merge leaving SK Telecom with a 20 percent stake. There have been rumors floating around that Helio stores will shut their doors in an effort to cut costs, which we haven’t been able to confirm nor deny, but we’re pretty sure they’re true. We’re unsure which stores will close, but I’d like to think that the NYC store that’s 200 meters away from me will remain open. We’ll have to wait and see, though. Now that all this merger nonsense is over with, I’d like for Helio to release OZ2.

Reuters is also reporting on this matter. Sources say Helio will be absorbed into the Virgin Mobile brand. Maybe we won’t see OZ2 with the backlit Helio name. :( I guess I’m ok with Virgin.

An SK Telecom official said nothing has been decided yet, but the two companies are “seeking various ways that would be mutually beneficial.” “What is certain is that SK Telecom will never give up on Helio, our foothold for business in the U.S.,” he added.

Update: Reuters is confirming what was reported by the Chosun Ilbo earlier today.

“(SK Telecom) is currently exploring strategic opportunities for Helio and has engaged in preliminary discussions with Virgin Mobile USA with respect to such an opportunity,” SK said in a clarification statement.

Talks between SKT and Virgin Mobile are said to be in the preliminary stages and that it may not lead to anything in the end. It’s also unclear whether or not SKT will sell it’s stake in Helio to VM or that they would purchase VM.

“SK Telecom has an aggressive stance on expanding its operation in the United States,” said Hyundai Securities analyst Lee Shi-hoon. “They have money to invest. It could be that SK changed its focus to Virgin Mobile after the deal with Sprint Nextel did not work out.”

Best Buy sells Virgin Mobile handsets like hotcakes, but their devices are less than desirable. VM has a stellar business, but there isn’t much room for them to grow, which is why their stock is undervalued. Helio, on the other hand, obviously offers bitchin’ devices and they were the first to offer the $100 unlimited plan before the major carriers followed suit.

Helio is burning cash and it will likely run out soon regardless of SK Telecom’s investment. It’s unclear how SKT will factor into this in the long run if the merger goes through, but it’s probably a safe bet that Helio will move to New Jersey because it’s cheaper to run and they’ll turn a profit much faster. That last bit is based on conjecture, but Helio and VM meeting with Best Buy together is the real deal. We’ll see what else we can dig up.