Amp’d Mobile Files for Chapter 11 Protection
6/4/07 – Los Angeles-based mobile service and entertainment provider Amp’d Mobile has filed for chapter 11 bankruptcy protection, according to a company statement released late Friday. Founded in 2005 by wireless industry veteran Peter Adderton, the startup has gained significant attention in its attempt to build an entertainment-focused mobile company.
In its statement, Amp’d said that its “back-end infrastructure was unable to keep up with customer demand.” It also indicated that it expects to continue normal operations and provide uninterrupted service to customers.
Amp’d operates in the mobile virtual network operator, or MVNO, space. In a nutshell, MVNOs are resellers of basic mobile service, as they do not own their own wireless spectrum or network infrastructure, but offer enhanced services on top of the basic wireless service.
In Amp’d’s case, the focus is entertainment offerings aimed at the youth market, and the company seemed to gain significant momentum in this area with recent announcements involving original content on mobile video, and development deals with MTV Networks and and major Hollywood producers. In addition, in March the company announced its expansion to Canada and Japan, and released a customized edition of the Motorola MOTO Q for Amp’d customers.
Amp’d has also been one of the most active fundraisers in the region, securing more than $360 million from a broad range of investors. But recently, there have been indicators of turbulence at the company, beginning with an unannounced across-the-board price hike for its handsets, followed by rumors that Adderton had left the company, and infighting over the company’s direction. However, according to the company’s statement, the management team remains intact, and there is no indication that Adderton has departed.
The bankruptcy filing will no doubt fuel further speculation about the viability of the MVNO business. Amp’d and the other major Los Angeles-based MVNO, Helio, have been subject to much scrutiny since their founding, and the business model was previously attempted unsuccessfully by ESPN and Disney.
Amp’d Mobile – www.ampd.com
