Virgin Mobile USA to Purchase Helio

Here's some interesting news from the wireless phone industry. According to a Reuters article, Virgin Mobile USA is set to acquire Helio, the U.S. mobile arm of South Korea's SK Telecom Co. The sum involve in this deal has not been disclosed and the deal is far from final. Sources have indicated that the terms agreed upon by both parties are loose.

The article also cited that this decision was reached because combining the struggling businesses of both parties was sen as beneficial. The announcement about this deal is expected to be released in the near future. However, SK Telecom did not offer any comments that would confirm this merge between struggling mobile phone carriers.

Mobile phone experts say that this is a good move from both companies even if there's no guarantee that the combined company will succeed. If the deals becomes complete, then SK Telecom can reduce risks from the U.S. business.

They expect the combination to work because Virgin Mobile has a scale and Helio has strong services. Some experts believe that the Virgin-Helio merge make sense because both companies target young customers and rent space on Sprint's network.

Helio is owned by SK who holds 69 percent and EarthLink Inc who governs 28 percent. According to the article, Virgin Mobile USA has expressed a desire to purchase the 69% of Helio owned by SK Telecom. However, there is no clear information whether Earthlink will sell its share of Helio to Virgin Mobile.

The initial terms of the agreement states that once Virgin Mobile USA takes over, SK Telecom would agree to invest a nominal amount of money in Helio. The agreement indicate that Helio will be injected into Virgin Mobile USA and the Virgin brand will be retained.

Well, this is certainly interesting. This merger may give Virgin Mobile the push it needs to become a major mobile phone carrier. Then again, it might also result in a rough merge similar to Sprint and Nextel. Tune in to this blog for more news and info on the world of wireless.

More Job Cuts for Motorola

If you have been tuning in to news in the mobile phone industry, then you are probably aware that Motorola has been struggling. The major mobile phone manufacturer has been suffering from slumping handset sales and have decided to split into two entities. The company has now decided to cut some jobs to cope with declining revenue by trimming down on its annual costs.

In 2007, the manufacturer's revenue was pegged at$36.7 billion, which indicated a loss of about 15%. The sharp drop-off in sales in wireless phones is probably responsible in this significant drop in profit. The mobile phone business it the company's largest division. When sales of cellphones plummeted by an alarming 33%, the job cuts became inevitable.

According to reports, Motorola is planning to layoff more than two and a half thousand employees . The company has publicly announced some of the job cuts in Asia, Europe and the US. However, it did not reveal the exact figures of the job cut in Chicago, where the company hires about fifteen thousand workers.

Motorola is not a stranger to job cuts. The company has used it before in an effort to improve its businesses. In 2007, more than seven and a half jobs were cut. The struggling company will have about 63,500 workers all over the globe when the lay off will be implemented. This is a significant decrease when compared to the nearly one hundred fifty thousand strong workforce the company employed in the year 2000.

Experts say that the company might be able to recover from its current slump by increasing the speed of its development process. This way, the company will be able to boost mobile phone profits by being able to launch unique and attractive handsets in a shorter period of time. Motorola's decision to separate its handset division from other business might also be able to lure innovative executives. New leadership might be the key to improving sales and helping the company to regain its former status as a world leader in mobile phone devices and technology.