Sky Dayton Steps Down As CEO of Helio
Erick Schonfeld
17 comments »
After a tough year in which partner Earthlink pulled back from its commitment to Helio, the virtual mobile carrier is now losing its CEO, Sky Dayton. (Dayton was also the founder of Earthlink). Although Dayton will become chairman, Helio’s remaining corporate partner, Korea’s SK Telecom, appears to be consolidating its control over the company (perhaps in an attempt to stem its losses). Dayton will be succeeded by Helio’s current president and COO Wonhee Sull, a former executive at SK Telecom.
Running a mobile service on another company’s network is difficult to pull off financially because the operation is always at a cost disadvantage to the big mobile carriers that own the networks that the MVNO’s (mobile virtual network operators) are leasing—in this case Sprint’s. The company claims 200,000 subscribers, paying an average of $85 a month, and is among the leaders in getting subscribers to use data services. (Helio users, on average, send 550 text messages a month; 95 percent access the Web on their phones versus a 13 percent industry average; and 60 percent use their phones to access MySpace alone). But it is still not making money. That is with revenues of about $20 million a month, according to the company (a $240 million run-rate). In the mobile world, you need a much higher number of subscribers to hit critical mass, even if you don’t have to spend billions of dollars on building out networks.
The short history of MVNOs is already littered with failed companies. The most inglorious of these was Amp’d, which went bankrupt after going through $360 million in capital, some of which went to buying ads on MTV and distributing promotional condoms. Hopefully, Helio won’t suffer the same fate.
Heehheheh.
I signed up and was very very impressed with their phone UI. Best in the biz. However, the Ocean is WAY too fat. They need to come out with a killer phone and they’d grow so fast, it’d make their head spin. They have a GREAT service with a great UI… they just need to get something very unique for their hardware and viola… minting money.
I asked Helo PR for an official comment on this story and they gave me a funny reply. Their story “Nobody is stepping down, people are just moving around”. Guess it all depends on how you look at it…
That is funny to here Boris!!
Considering that Sky Dayton’s a scientologist (so says his Wikipedia bio) and Earthlink is run by Scientologists, could Anonymous be behind this disaster?
Thanks Dale, the whole story is here: http://thenextweb.org/2008/01/.....-promoted/
Erick — You say Sky is remaining as Chairman when in fact he was not Chairman before today. Today’s announcement was about Sky shifting his role from CEO to Chairman of the Board.
-Brooke
Techcrunch is getting much funnier than before. First Google jet kick out. And this condoms promotion.
HAHAHHAH
And tomorrow he will be jumping up and down on Oprah’s couch.
That’s pretty lame to misconstrue “steps down” with “promoted to Chairman of the Board”. That’s why I love media!
Do you mean “stem its losses”? Stymie means to “hinder progress.”
Being kicked upstairs to non-executive chairman definitely isn’t a promotion. Attempting to call it that is silly, but that is what PR agencies are paid to do.
“A non-executive chair is a part-time officeholder who sits on and chairs the main board of a company, and also usually provides support and advice to a CEO. This position usually entails fulfilling a similar function on a number of ancillary board committees, as well as being a political figurehead of the Company.”
SKT never actually wanted Sky to be CEO of Helio, but through his tacit control over EarthLink’s management team, Sky was able to lever himself into the role as a condition of EarthLink’s initial investment into the Joint Venture. Now, just months after assuming control of Helio, SKT has acted upon their original desires - which evidently haven’t been changed by the ’success’ of acquiring 200k subscribers for $600M. A steal at $3000 per subscriber!
Tough business MVNOs.
What percent of Helio do you think EarthLink still owns? I guess we’ll probably see a huge writedown of their investment in one of their next quarterly statements. I can’t imagine SKT didn’t use every ounce of leverage against EarthLink in that negotiation.
mikebk: Sky is a scientologist. He is a visionary, not an operator.
EarthLink is not run by Scientologists. Most of them left long ago. It is run by operators, not visionaries.
Trust me, these thing I know.
I personally don’t see how these guys will survive. Why would anyone want to choose them? They have two main problems:
1) VERY limited choice of phones. It was great when they were an early leader in providing a smart device. I can’t see how, with the number of models offered by the big providers, they can attract interest with such a limited choice of devices.
2) Minutes - All the big providers have “in calling” which allows most people to purchase a much lower price plan. How many “in” calls can you make to/from Helio phones?
Good luck, but I see their biz plan as one that is flawed.
I hate Helio. I got the Ocean, realizing that it wasn’t the phone for me and returned it. I took me over 50 calls and 3 months of waiting, and I still haven’t received my money. I will never outsource a company’s customer support no matter how expensive it is.