SK Telecom has long been searching for a way to extend more services to the US. Now it is starting to look like they may have found a way. Reports are confirming the rumors that SK Telecom may be in the early stages of buying Virgin Mobile. If this merger does in fact take place, it is still unclear exactly how the business end of things will pan out in regard to the combining of two mobile companies. However, it is apparent that the merger will, in combining two smaller carriers, eliminate overlapping operations and increase revenue since the service will be providing for a larger number of users. Virgin Mobile, together with Helio, which is 70% owned by SK Telecom, has 5.4 million subscribers.

SK Telecom’s introduction of new applications to their new users would be a great way to tap into the up and coming younger generation of users and new subscribers. By utilizing the new population of users that Virgin Mobile would provide, SK Telecom would have the user base to experiment with several different types of internet services in order to find the service style that appeals to the broadest range of customers. Of course, in order to seal the deal, SK Telecom may need buy-in from Sprint Nextel who owns a small part of Virgin Mobile. This may actually not be out of the question either, since a large number of Sprint customers are unhappy, and their may be just the opportunity Sprint needs to lighten their load so that they can spend a little more time improving their services without the users suffering.

If SK Telecom does go ahead with their purchase of Virgin Mobile, it might just provide the support that VM is needing right now. In October of last year, Virgin Mobile stock was down because of a sluggish subscriber growth and a heavy debt load. In order to come out of these valleys, Virgin Mobile will need to offer new and innovative services to entice customers, and that is just what SK Telecom may have in mind.

Source: businessweek.com

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