South Korea’s SK Telecom has admitted it is in talks with US MVNO Virgin Mobile regarding a possible tie-up with Helio, its own US MVNO. Despite earlier denials, the operator said in a statement today that it is “exploring strategic opportunities for Helio and has engaged in preliminary discussions with Virgin Mobile USA with respect to such an opportunity.” However, it is still unclear whether the talks concern SK Telecom acquiring Virgin Mobile USA or Virgin Mobile USA acquiring Helio. In both scenarios it is likely that the two MVNOs will be merged together. Helio is 69 percent owned by SK Telecom and 28 percent owned by EarthLink, the US ISP, while Virgin Mobile USA is owned by the Virgin Group and Sprint Nextel, the network used by both MVNOs.

According to Reuters, SK Telecom is understood to be keen to expand outside of its saturated domestic market into markets such as the US and China and was reportedly involved in a plan to invest US$5 billion in Sprint Nextel last year, which was rejected. Meanwhile, consolidation in the US MVNO market may be being driven by the ongoing poor performances of many of the companies involved: Helio has reportedly yet to generate a profit for SK Telecom, while Virgin Mobile USA is reportedly looking to dramatically scale down its operations due to its weakening business outlook.