The Financial Times says the deal could be announced as early as this week—but it could mean the end of the Helio brand as we know it.

The report comes just days after word that talks between the pay-as-you-go Virgin Mobile and the high-end MVNO Helio had broken down—a development that could have left Helio on the brink.

According to the FT, the proposed merger would call for Helio to be "injected" (ouch) into Virgin Mobile, with the newly combined service dumping the Helio moniker in favor of the "better-recognized" Virgin Mobile brand.

As the FT story notes, the two virtual carriers (which both piggyback on Sprint's cellular network) are both facing hard times, with Helio hemorrhaging cash (it lost more than $300 million last year) and Virgin Mobile watching its revenue dip and subscribers flee. But a combined MVNO could, among other things, negotiate better terms from Sprint.

If the report is true (and the Financial Times has a pretty good track record), it would be good news for current Helio subscribers (of course) and phone aficionados in general, especially given the recent spy shots of the rumored Ocean 2 QWERTY phone. It would be a shame if the much-anticipated follow-up of the top-notch Ocean never saw the light of day.

Still, I'd be sad to see the Helio brand disappear. After a shaky start, Helio emerged as one of the top carriers (virtual or otherwise) in the business, with some truly cutting-edge (and all 3G-capable) phones.

It's hard to say whether the tradition would continue under Virgin Mobile, a pre-paid MVNO with a lineup of mid- to low-end (if stylish) handsets.

If the merger does indeed happen, I'd like to think that the Helio brand would live on with individual phones (like the Helio Ocean 2), but the Virgin Mobile marketing department might nix that idea.

In any case, there's been no official comment yet from Virgin or SK Telecom (the South Korean company that funds Helio), at least not yet. Stay tuned.

Related:
Virgin Mobile and SK to combine operations in the US [Financial Times]