SK Telecom to Continue Funding Helio; EarthLink Accepts Diluted Share

American internet service provider, EarthLink Inc., confirmed on Wednesday that it will not invest any more money in wireless joint venture, Helio, leaving its partner, South Korea Telecom to fund the joint venture for the foreseeable future.

SK Telecom apparently plans to invest up to an additional $270 million in Helio, diluting EarthLink’s 50% share in the startup, but leaving it with a significant minority stake.

“This new agreement enables EarthLink to retain a substantial ownership position in Helio without investing any more cash into the joint venture, and these changes should result in our prior investment having real future value as the joint venture continues to grow,” commented EarthLink president and CEO, Rolla P. Huff.

EarthLink retains the right to make additional investments in Helio if and when its own finances improve. If it chooses not to invest further in the venture, and SK Telecom injects the full $270 million, EarthLink will be left with a stake of about 22%.

EarthLink has agreed to relinquish one Helio board seat as part of the deal, giving SK Telecom effective control of the company.

Sprint Nextel Cancels WiMAX Partnership with Clearwire

American mobile phone carrier, Sprint Nextel, has scrapped plans to partner with wireless broadband startup, Clearwire, on a nationwide WiMAX network.

The partnership was reversed after Sprint decided to dismiss its CEO, Gary Forsee, last month. The collapse of this partnership is being seen as a major blow to Clearwire, whose stock price dropped more than 25% yesterday, to close at $13.49 on the NASDAQ.

Clearwire’s losses have swelled significantly for the past three years, and its third-quarter sales totaled just $41.3 million, or less than one hundredth of Sprint’s.

“The Sprint deal was really good for Clearwire, and it’s bad that they lost that,” commented Jefferies & Co. analyst, Jonathan Schildkraut. “Clearwire will have to shoulder a bigger burden to get broader network coverage.”

Customers Show Interest in PC-Home Theater Convergence

A growing number of consumers are interested in accessing PC and broadband internet content from their home theater systems, according NPD Group’s recent Connected Home Theater study.

17% of survey respondents expressed interest in accessing their PC hard drives from a home entertainment system. This included 25% of users who already have a home broadband network up and running.

19% of respondents, meanwhile, said that they would like to access the internet from their TVs.

“[Faster] Internet access, new content sources, and the evolution of the PC as a multimedia repository promise to change the features and functionality of devices in the home entertainment center,” explained NPD Group’s director of industry analysis, Ross Rubin. “This in turn will lead to new opportunities and challenges for manufacturers, as well as more choices, and possibly greater confusion, for consumers.”