Can Amp’d Mobile Survive?
6/8/07 – The story of Los Angeles-based mobile virtual network operator Amp’d Mobile, its chapter 11 bankruptcy filing, and its prospects for survival, is slowly trickling out. It seems that in the wake of the filing, Amp’d had a surprisingly lenient collections policy, as publications like RCR Wireless News are reporting that according to the bankruptcy filing, nearly half of Amp’d subscribers were “non-paying customers” due to “a host of credit and collections problems that contributed ultimately to a liquidity crisis.”
It also appears that Amp’d was behind on its payments to Verizon Wireless, which provided network capacity for Amp’d, and Verizon threatened to disconnect the company’s subscribers from its network, ultimately leading to the decision to file for bankruptcy. Reports are also surfacing that the company owes Best Buy stores $8 million.
In the face if its creditors and Verizon’s still standing threat to shut off customers’ service, things don’t exactly look rosy for an Amp’d turnaround. However, keep in mind that chapter 11 provides protection during a restructuring, which is exactly what Amp’d president Bill Stone has been talking about this week. Also, consider that when you think about public perception, despite its warnings, Verizon is unlikely to shut off service for somewhere around 200,000 Amp’d subscribers.
The MVNO cell phone service operator model may not ultimately work for Amp’d, but it seems very possible that the company could emerge from bankruptcy as a mobile content provider. Content has been the company’s primary value proposition, and it has found some success with proprietary content. The company also says its customers (at these those that paid their bills) are avid consumers of content, which allows the company to claim an average revenue per user of $100 per month—a number which industry analysts agree is significantly higher than the average.
Amp’d Mobile – www.ampdmobile.com
