Virgin Mobile USA is moving to acquire Helio's subscriber base in a move that more or less equals a bail out for the "virtual" telecom provider. With a mere 200,000 or so subscribers, Helio is not exactly an industry heavyweight, so it is not surprising to learn existing Helio subscribers will simply be rolled into the existing Virgin brand. Still, one particularly interesting question remains. With Virgin already having about five million subscribers, along with its own market share concerns, why are Virgin executives even throwing a lifeline to such an underperforming company as Helio?

The biggest problems, outlined by Piecyk: Virgin Mobile is having a hard enough time eking out a profit in its existing business of selling cheap, pre-paid phone service, which is only going to get more competitive. (Virgin made $4.2 million on $1.2 billion of revenue last year.) And even once Helio is worked into Virgin's distribution network, it doesn't add much.

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