Virgin Mobile USA to buy SK Telecom's U.S. unit-FT

SEOUL, June 25 (Reuters) - Virgin Mobile USA (VM.N) is set to acquire a U.S. mobile arm of South Korea's SK Telecom Co (017670.KS) as both sides agreed to combine their struggling businesses, the Financial Times reported on Wednesday.

A deal was agreed in principle and an announcement could be made as early as this week, a person with knowledge of the matter was quoted as saying. SK Telecom declined to comment.

SK Telecom, South Korea's top mobile operator, said in May it was in preliminary talks with Virgin Mobile about strategic opportunities for its Helio U.S. arm.

Helio, which has been losing money, is 69 percent owned by SK, with EarthLink Inc (ELNK.O) holding 28 percent.

FT said the agreement would see Helio injected into Virgin Mobile USA and the Virgin brand will be retained.

SK Telecom has also agreed to invest a nominal sum in Virgin Mobile USA, the newspaper said.

Virgin Mobile, which is partly owned by Richard Branson's Virgin [VA.UL] and Sprint Nextel Corp (S.N), serves more than 5 million customers. It has seen growth slowing amid the U.S. economic slowdown and increased competition from rivals.

A merger between Virgin and Helio could make sense as both target young customers and rent space on Sprint's network. (Reporting by Rhee So-eui)