Helio aims for the young with fancy cell service

The Atlanta Constitution-Journal reports that Helio, a joint venture between EarthLink and SK Telecom of Korea will sell ultra-hip phones and service that "will initially be sold over the Internet and by phone, but by the end of the month will also be available nationwide in stores and through an army of college-student sales reps that Helio hopes to recruit."

According to the article, "Helio isn't cheap: The "Kickflip" handset costs $250 and the "Hero" model is $275. Service runs $85 to $135 a month. Downloads of games or some video clips cost an extra $2.50 to $6."

The MVNO is betting on the college crowd and social networking to succeed. Julie Ask at Jupiter Research compared Helio to "Amp'd Mobile, another MVNO that targets young and super-mobile consumers with phones that play music and videos and allow easy text messaging."

Ask said, "Everybody thinks they have their own little niche space and they'll tell you they're unique, but that's not necessarily the case." Ask believed "Helio's biggest hurdle may be its price."

According to a recent Jupiter survey, "only 13 percent of respondents said they paid more than $100 for a cellular handset. About 19 percent said they used a handset they got free from their carrier, while the majority said they paid less than $100 for an upgraded model."

Ask also noted that "typical cellphone bills, meanwhile, are $50 to $60 a month."

Helio is shy when he segment its target audience as:

• the "spoil me's" who still get their parents to pay their monthly cell bill
• the "see me's" who are the first to toss their cellphone on the table to show off how cool they are
• the "feed me's" who constantly want updates on news or what their friends are doing.

They of course left out the "abuse me's" who are willing to overpay for untried yet overpriced handsets and services. ESPN Mobile early adopters who paid $399 at launch for their Sanyo handsets fit in this category.

Helio goal is garner one-fourth of the 12 million "he always-connected young consumers" by 2010. This "would be a big enough business to generate an estimated $2 billion in sales and pay back the $440 million that EarthLink and SK Telecom invested in the venture."

Jupiter's Ask though "the goal doesn't seem unreasonable, particularly if Helio brings down its handset prices." She concluded, "They've got about as much or more of a chance of succeeding at that as anybody else. Especially with the kind of financial backing and personnel they have behind them."

How's that for putting a stake in the ground?