Virgin Mobile USA to Acquire Helio for Approximately $39 Million in Equity

WARREN, N.J. /PRNewswire-FirstCall/ — Virgin Mobile USA, Inc. (NYSE: VM), a leading national provider of wireless communications services, today announced that it has entered into an agreement to acquire Helio, a joint venture between SK Telecom and EarthLink, Inc. (NASDAQ: ELNK) providing highly advanced postpaid products and services with unique user applications. Under the terms of the agreement, Virgin Mobile USA will acquire Helio from SK Telecom and EarthLink for limited partnership units equivalent to 13 million shares of Virgin Mobile USA class A common stock, with a value of $39 million based on the closing price of Virgin Mobile USA’s class A shares on June 26, 2008.

The transaction is expected to close in the third quarter of 2008, subject to receiving regulatory approvals and satisfaction of other customary closing conditions.

Dan Schulman, Chief Executive Officer, Virgin Mobile USA, said, “We believe that the acquisition of Helio and the related strategic investments by SK Telecom and Virgin Group are of enormous benefit to our business, both financially and strategically. The reduction of our long-term debt and the increase to our revolver will realign our capital structure, providing us with greater liquidity and increased flexibility to grow our business. At the same time, we will acquire an asset, which will add to our scale, allowing us to reduce our network costs and assure that Helio’s customers are immediately profitable when brought on to our cost structure. We expect the combined elements of this deal will drive increased Adjusted EBITDA and free cash flow.”

Accelerating Virgin Mobile USA’s Growth

Upon closing, this transaction is expected to achieve a number of important steps for Virgin Mobile USA. Strategically, the acquisition of Helio allows Virgin Mobile USA to add a set of unique and differentiated data applications to its suite of products and services, greatly enhancing its offer across its customer base. Entry into the postpaid market will also give the Company access to approximately 140 million prospective customers(1). Including reductions in Virgin Mobile USA’s network rates and an improved capital structure, this transaction is expected to be accretive to Adjusted EBITDA in 2008, excluding non-recurring transition costs, and to be accretive to Adjusted EBITDA and free cash flow in 2009.

With the acquisition of Helio, Virgin Mobile USA will gain an established and highly advanced postpaid billing and customer care platform. In addition, Helio has approximately 170,000 existing subscribers with an ARPU of approximately $80 and a handset inventory of approximately 85,000 units with a book value of approximately $17 million(2). Acquiring Helio’s customers and expanding its offer portfolio is expected to increase Virgin Mobile USA’s volume of minutes and drive down the Company’s cost per minute under an amendment to its PCS Services agreement with Sprint (NYSE: S).