Amp’d Mobile Implodes: Burns $360 million, Declares Bankruptcy
by Duncan Riley on June 2, 2007

ampdmobile.pngAmp’d Mobile, a popular Mobile Virtual Network Operator (MVNO), has filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court in Delaware.

The company competed with VelvetPuffin, Loopt and Helio in an attempt to deliver a compelling mobile based social networking product to a worldwide marketplace of 2.6 billion cell phone users.

According to mocoNews, Amp’d Mobile owes $33 million to Verizon Wireless, $16 million to Motorola and $10 million to Vivendi. Smaller creditors include BestBuy at $8 million and MTV Networks: $1.8 million. Total debt is more than $100 million with assets less than that figure.

Amp’d Mobile had previously taken $360 million in funding over 5 rounds. Investors include RedPoint Ventures, Highland Capital Partners and Columbia Capital.

Amp’d Mobile is now in the TechCrunch Deadpool.

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I’ve been involved with MVNOs for some time now and all have a distinct cost disadvantage with the “Big 4″ carriers. Although they were spawned to reach markets the big guys could not, they still go head to head with carriers. Some have done a good marketing job but financial responsibility has never been a strong point.

 

Ya - this company was doomed. Did anyone else see their horrible TV commercials? It was quite obvious that they were seriously reaching.

 
take the booth at the mall FREE - June 4th, 2007 at 10:56 am PDT

Hey all i have a booth at the mall with what else but ampd mobile. if anyone thinks that this company has any potential be my guest. i can email you the cost of running the card at the mall out in Long Island New york. I have to say we have done in the past three months something like 200 new subs but i cant say that it was my selling skills although i would like to. i think that it was just the matter of everybody and there mother (literally) getting approved. I was approving kids that just graduated from high school. just turn eigtheen and getting approved. no credit needed. Anyway kind of a disapointment but i am a little sick of it. if anyone wants to take a chance with this one and thinks this company is on a come back be my guest because i am done!

EMAIL ME AT EMILTBOK21@AOL.COM

 

Does Anyone have any faith in this darn company? i think i can speak for everyone and say well jus thave to wait and see. lots of companies that filed chapter 11 managed to dig them selves out of the grave. I sure hope that ampd mobile see there mistakes, studies them very carefully and then hopefully someone other than Peter Adderton will take over and make this a hit.

 
 

This kind of fallout is really big and bad news any way you slice it. The management team maybe got too much credit for the Boost Mobile deal’s success which was a similar concept in terms of the target market but in a time with lower expectations. Maybe the $300M+ was a reflection of too much investor confidence in the “Serial Entreprenuer Theory”. I suspect Sky Dalton’s Earthlink success may not be a clear signal that Helio has a secure bridge to success. Virgin the MVNO with the best chance of success is still no barn burner. The belief that MobileTV could drive the want for these MVNOs has also been a disappointment and I suspect the next fallout could be for companies like GOTV and MobiTV (only 2M customers with several Million in funding). This could serve Investors as a lesson learned that the trend of putting bigger bets on fewer deals may not always be the best strategy. Sad part is this may shrink fundings in the near term but, hopefully not. Its very disturbing that Telecom start ups have had a pretty bad track record for all the hope there is in the industry.

 

The bottom line is value - are you generating any NEW value for customers. Ampd was too broad and it looked no different then the major operators (worse, it had no brand). There are models that do add value to what operators already do - any partner with them, rather then compete with them. Companies like Rave Wireless which serves colleges, Qualcomm’s new healthcare MVNO and possibly even Google’s yet-to-be-detailed phone service. Not to mention the iPhone — these approaches are adding NEW value to the customer. People will pay for value, they will not for substitutes.

 

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