Latest Niche Wireless Provider Targets Youth Market

NEW YORK -(Dow Jones)- Helio LLC, the latest niche wireless service provider to pop up, launched Tuesday with a set of phones and services geared towards the affluent youth and Korean-American markets.

The service, which is a joint venture between Earthlink and SK Telecom, will utilize Sprint Nextel's third-generation high-speed wireless network to deliver high-end services such as video and music downloads.

Pricing plans range between $85 and $135 a month, depending on the amount of minutes. Helio executive Stuart Redsun said the carrier was targeting a younger crowd ranging from 18 to 34 years old, from the college student from a well-off family to the successful young professional.

"We set out to create a higher end aspirational brand," he said.

Helio will be launching a side brand called "Helio, powered by SK Telecom," which will target Korean Americans who are familiar with the South Korean wireless provider. The service will include handsets with Korean language keypads and text messaging capability, preferred rates to South Korea, and video and music content that cater to the Korean audience.

Other niche players have gone after a specific ethnic market. Movida Communications Inc., owned by the Cisneros Group, launched last year and specifically targets the Hispanic population.

For Sprint, Helio, which also has an agreement to eventually run on Verizon Wireless's network, is the latest wireless reseller, also known as a mobile virtual network operator, to lease its network. Sprint, the third-largest wireless carrier in the U.S. by subscriber base, has been particularly aggressive in leasing its network to MVNOs. In addition to Helio, it powers the network for ESPN Mobile, Disney Mobile and pre-paid service Virgin Mobile, which it jointly owns with Virgin Group.

Other carriers including Verizon Wireless and Cingular Wireless have been less aggressive, although each has made its own moves into the wholesale business. While the revenue generated is lower, the margins are much higher because the resellers handle the billing, customer care and marketing of the products.

Helio will face a lot of competition in the youth market, as it faces the likes of Virgin Mobile, Amped and Boost Mobile, all of whom share similar age demographics. Redsun said Helio will differentiate itself through its premium content and other features such as its partnership with popular social networking Web site MySpace.com.

The wireless reseller expects to sign 3 million subscribers by the end of 2009. Redson declined to comment on the company's expectations for revenue growth or profitability.

-By Roger Cheng, Dow Jones Newswires; 201-938-2020; roger.cheng@dowjones.co

(END) Dow Jones Newswires "

Posted to the site on 2nd May 2006