After years of pursuing the only MVNO model proven to work, prepaid, Virgin Mobile is taking a chance on niche postpaid services, a model that has resulted primarily in bankruptcy in the U.S. It confirmed last week it is buying data-centric virtual operator Helio in $39 million stock deal, which will give Virgin only a paltry number of subscribers but gives it a broad outlet into the growing data market at a time when voice growth industry becomes stagnant.

The deal between Virgin and Helio owners, SK Telecom and EarthLink, creates some synergies for Virgin. Both Virgin’s prepaid base and Helio’s tech-savvy users scale young demographically. Also the added voice minutes of Helio’s high-use customers will drive down Virgin’s per-minute wholesale rates with both operators network provider, Sprint. Otherwise, the two operators are at opposite ends of the MVNO spectrum.

For an MVNO Virgin has a huge customer base of more than 5 million subscribers. Helio’s customers number only 170,000. But those customers bring an average revenue of $80 a month, much of it in data revenues, compared to the $20 a month the typical Virgin subscriber brings in. A combined Virgin-Helio will basically target the extremes of the wireless industry’s segments: a small base of high-dollar, in-contract, postpaid customers at one end and a large base of low-dollar, high-churn, prepaid customers at the other. The big questions are whether Virgin will be able to even out that imbalance as well as find a mid-point for those two types of customers to meet.

Virgin executives focused mainly on the improved financial structure of the company after the acquisition and the cost synergies the combined operators would have. In particular, Virgin Mobile USA CEO Dan Schulman pointed out that Helio’s postpaid offering will create a logical progression path through the Virgin service ranks as they gain credit ratings and more disposable income. “With about 20% of our disconnects currently going to postpaid products, we believe this new platform will be a powerful retention tool as we offer a unique and desirable postpaid alternative to our customer,” Schulman said in a statement.

Though downplayed in the announcement, Helio’s data offering was probably a major incentive for Verizon to buy out the company. Originally founded as a data application-centric service for the tech-savvy, Helio played up the sophistication of its custom phones and their Internet connectivity, making games and unique access to online services such as MySpace a centerpiece for its brand. Content companies used Helio as a test bed to launch new services and applications—MySpace was available on the Helio deck long before it went to mass market phones—but lately its time-to-market advantage has been whittled away. When YouTube launched its entire catalog for mobile, it started with the Helio deck but made it available over all networks a few months later.

Helio, however, hasn’t had much success at scaling its service and has required cash injections from its parent companies to stay afloat. While Virgin’s much larger subscriber base will bring stability to Helio, Virgin is likely to try and tap into Helio’s data services play to offset declining revenues. Between Q1 of this year and last, Virgin’s already low prepaid voice APRU fell from $22.41 to $19.93 a month. Meanwhile its growth rate has slowed down to trickle. It added 310,000 customers in Q1 of 2007, but only 18,000 customers last quarter. Meanwhile its churn rate has jumped from 4% to 5.1%.

A study by Bernstein Research recently found that revenue growth among wireless operators is being driven almost entirely by new subscriber additions. Voice revenues are falling as operators offer more minutes than customers can use at lower prices. Data, however, is supposed to fill in the gaps, adding revenue growth to offset voices decline. The problem is that data is growing fast enough to replace that missing voice revenue. The bulk of data revenues today are coming from SMS, which are subject to the same pricing pressures as voice. The high-dollar data services plans and subscription services aren’t taking off as quickly. Almost by definition though, every Helio customer is a data plan customer, explaining its high monthly APRU. If Virgin can grow Helio’s customer base beyond the handful of subscribers it has today, it may have the answer to declining revenues and increasing churn on the prepaid side of its business.