Earthlink, one of the co-parent of the MVNO Helio, filed its 10-K annual report this Friday, and in it tons of details about Helio‘s financials for 2006 and the need to pump in more cash, either by the parents or through additional fund raising. Of course it is still too early to judge the long term prospects, but Earthlink and SKT both being public firms, would be interesting to see how long-term a view the two can take on this.
Both parent Earthlink and SK Telecom were supposed to invest $220 million each...on Eartlink’s side, it was $180 million in cash and assets valued at $40.0 million.
-- Here’s how it went: The two invested an aggregate of $166.0 million of cash and non-cash assets upon completing the formation of Helio in March 2005, invested an aggregate of $78.0 million of cash in August 2005, invested an aggregate $157.0 million in 2006 and have committed to invest additional cash of $39.0 million in 2007, including $27.0 million that was invested in February 2007.
-- During 2006, Helio received minority investments, which reduced EarthLink’s and SK Telecom’s economic ownership interest from 50 percent at formation to approximately 48 percent as of December 31, 2006.
-- For 2006, Helio lost about $191.8 million, on revenues of $46.6 million.
-- The auditors, Ernst & Young, said in the report that they have “substantial doubt about the company’s ability to continue as a going concern”, though that is boilerplate language.
--—Advertising cost: $1.2 million and $21.6 million during the periods ended December 31, 2005 and 2006, respectively.
Tons more details in the annual report. Download the PDF of Helio’s 2006 financial report here.