WARREN, NJ, August 22, 2008 — Virgin Mobile USA, Inc. (NYSE: VM), a leading national provider of pay-as-you-go wireless services, today announced that it has completed its acquisition of Helio, a joint venture between SK Telecom and EarthLink, Inc. (Nasdaq: ELNK) that complements Virgin Mobile USA’s strengths through its specialization in highly advanced postpaid products and services. The acquisition was completed based on the terms and conditions outlined in Virgin Mobile USA’s June 27, 2008 press release. All necessary regulatory approvals have been obtained.
In connection with the acquisition, Helio shareholders SK Telecom and, EarthLink and have received limited partnership units and shares equivalent to 13 million shares of Virgin Mobile USA Class A common stock, with a value of $38 million based on the average closing price of Virgin Mobile USA’s Class A shares, as of two trading days before and two trading days after the date of announcement. In addition, SK Telecom and Virgin Group will each invest $25 million in Virgin Mobile USA for preferred shares.
Dan Schulman, Chief Executive Officer, Virgin Mobile USA, emphasized the benefits of the transaction to Virgin Mobile USA and the new opportunities for growth it creates. “Adding Helio’s differentiated postpaid offer to Virgin Mobile USA’s existing portfolio will expand both our market opportunity and our ability to deliver new products and services more rapidly,” he said. “We believe this transformative transaction will bolster our leading position in the wireless space, and enable us to provide customers with whatever they need in wireless, always with our focus on great value, flexibility and customer service. We look forward to revealing our roadmap for expanded, innovative offers in the near future.
“This acquisition of Helio also comes with a number of financial benefits, including improved network rates from Sprint for Virgin Mobile USA, and strategic investments by SK Telecom and Virgin Group which improve our capital structure and increase liquidity,” Schulman said.
Schulman said that the transaction provides Virgin Mobile USA with:
- A set of unique and differentiated data applications
- Entry into the postpaid market, with a sophisticated billing and customer care platform
- Revised terms for the Sprint PCS Services Agreement [NYSE:S], expected to result in an 8% reduction in the Company’s effective cost per minute in 2009
- Reduction in net debt of approximately $35 – $40 million, through the investments of $25 million each by SK Telecom and Virgin Group in the form of preferred mandatory convertible stock at the price of $8.50 per share
- An increase to Virgin Mobile USA’s total revolver from $75 million to $135 million, through additional commitments of $25 million by Virgin Group and $35 million by SK Telecom
- The addition of SK Telecom as a strategic shareholder with two seats on the Company’s Board of Directors
A percentage of the equity issued and issuable in the transaction will be subject to escrow for one year to secure certain indemnification obligations. Additional information is available at www.investorrelations.virginmobileusa.com.
About Virgin Mobile USA
Virgin Mobile USA, Inc. [NYSE: VM], through its operating company Virgin Mobile USA, L.P., offers more than five million customers control, flexibility and choice through monthly Plans Without Annual Contracts, with national coverage powered by the Sprint PCS network. With its pay-as-you-go plans and the addition of Helio’s postpaid offerings, Virgin Mobile USA now provides consumers with the broadest range of wireless alternatives. Virgin Mobile USA’s full slate of smart, stylish and affordable handsets are available at approximately 40,000 top retailers nationwide and online at www.virginmobileusa.com, with Top-Up cards available at more than 140,000 locations. Virgin Mobile USA is known for its award-winning customer service, and its customers report a 90% satisfaction rate. Virgin Mobile USA allows customers to earn free minutes in exchange for viewing advertising content online through the innovative Sugar Mama program, and contributes a portion of profits from downloadable content to The RE*Generation, its pro-social initiative to help homeless youth.
About Helio
Helio, LLC, now part of Virgin Mobile USA, has built a reputation as the mobile brand for the Internet generation with advanced mobile services, exclusive high-end, connection devices like the Ocean, and integrated pricing on a nationwide high-speed 3G network. Helio was launched in 2006 as a joint venture between EarthLink and SK Telecom, one of the world’s most advanced wireless carriers and now an investor in Virgin Mobile USA. For more information, visit www.helio.com.
About SK Telecom
SK Telecom (NYSE: SKM, KSE: 017670) is the top wireless communication provider in Korea, where it has more than 22 million subscribers taking up more than 50% of the total market. The company established in 1984, reached KRW 11.28 trillion in revenue in 2007. SK telecom was the first to launch and commercialize CDMA, CDMA 2001x, CDMA EV-DO and HSDPA networks, and it currently provides cellular, wireless internet, mobile media, global roaming service and more. For more information, please visit www.sktelecom.com or email to press@sktelecom.com.
BT Acquires Ribbit
MOUNTAIN VIEW, Calif. — July 29, 2008 – BT today announced it has acquired Ribbit Corporation, a Silicon Valley-based “Telco 2.0″ platform company, for $105 million in cash, on a cash-free, debt-free basis. The acquisition will accelerate BT”s strategy to transform itself into a next- generation, platform-based, software-driven services company.
Based in Mountain View, California, Ribbit – “Silicon Valley’s First Phone Company” – provides an open platform which enables developers to create new and innovative voice applications and services by combining telephony and internet technologies in new ways.
JP Rangaswami, managing director of service design at BT, said: “Silicon Valley is emerging as a hotbed of telecommunications innovation. With Ribbit, not only do we extend our presence in the Valley, but we also gain a groundbreaking platform, a growing community of developers and a world-class team that share a common vision. Buying Ribbit lets us accelerate that vision.”
Ted Griggs, Chief Executive of Ribbit, said: “The communications industry is entering a new phase. Closed networks are becoming open platforms and developers are now driving innovation. By adding Ribbit’s capability to the power of BT’s global 21CN platform, we will now be able to give the development community the tools they need to innovate on a global scale. We are delighted – BT is exactly the partner we were seeking.”
Using Ribbit’s platform, developers are able to add voice and automation features to virtually any web-based application or community. For example, using Ribbit, developers have integrated voice into salesforce.com and built voice applications that run directly from Facebook or iGoogle. Since its launch, Ribbit has attracted thousands of developers, launched an innovative solution for the enterprise software market, and has begun testing a consumer application scheduled for general release later this year.
The acquisition of the Ribbit platform will complement BT’s existing capability in the software platform space with its award-winning Software Development Kit (SDK) initiative. BT’s SDKs enable developers to integrate new applications with BT’s services using a single line of code. Ribbit, which will maintain its management team and identity, will extend its global footprint by becoming part of BT, one of the world’s leading providers of communications solutions and services operating in 170 countries.
Michael Boustridge, President, BT Americas said: “The Ribbit platform makes it simpler, cheaper and faster to build communications functionality into applications, enabling developers to introduce new revenue-generating voice services in hours, rather than weeks. By combining the Ribbit platform with BT’s existing web services, we have the potential to deliver some of the world’s finest applications for communications innovation benefiting consumers and businesses alike.”
Ribbit Corporation was founded in February 2006 and funded by venture capitalist firms Alsop Louie Partners, Allegis Capital, KPG Ventures and Peninsula Ventures. Ribbit is being acquired from these firms and certain of Ribbit’s founders and employees.
About Ribbit
Ribbit is working with the best and brightest technology and business leaders to build Silicon Valley’s first phone company. Our mission is to “liberate voice from the device, and integrate it into the workflow of life, both business and personal.” By providing a world-class telephone carrier infrastructure — and the first open platform for Internet and voice developers — we are helping to unleash innovation across the entire telephony marketplace, from the development of leading-edge consumer voice services to the integration of voice with the world’s best business applications.
Ribbit headquarters are located in Mountain View, CA. Ribbit has received investment from Alsop-Louie Partners, Allegis Capital, Peninsula Equity Partners, and KPG Ventures. For more information about Ribbit, please visit www.ribbit.com.
About BT
BT is one of the world’s leading providers of communications solutions and services operating in 170 countries. Its principal activities include the provision of networked IT services globally; local, national and international telecommunications services to our customers for use at home, at work and on the move; broadband and internet products and services and converged fixed/mobile products and services. BT consists principally of four lines of business: BT Global Services, Openreach, BT Retail and BT Wholesale.
In the year ended 31 March 2008, BT Group’s revenue was GBP 20,704 million with profit before taxation and specific items of GBP 2,506 million.
British Telecommunications plc (BT) is a wholly-owned subsidiary of BT Group plc and encompasses virtually all businesses and assets of the BT Group. BT Group plc is listed on stock exchanges in London and New York.
For more information, visit bt.com/aboutbt.
Inquiries about this news release should be made to the BT Group Newsroom on its 24-hour number: 020 7356 5369. From outside the UK dial + 44 20 7356 5369. All news releases can be accessed at our web site: http://www.bt.com/newscentre.
Media Contact
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The Conversation Group
(650) 483-5083
Don Thorson
Ribbit
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