July 23, 2007

2 Min Read
Ampd Out

By Tara Seals

Well, its the end of a story which could tentatively be called Behind the Minutes: Ampd Mobile. By all reports, Ampd Mobile will likely cease operations Tuesday. Like a made-for-VH1 rock and roll tragedy, the once-cool MVNO has fallen onto disreputable hard times, driven by excess and self-indulgence.

While its Web site says the shutdown is potential, the hipster MVNO has asked the bankruptcy court for permission to auction its assets immediately, and the courts answer was expected Monday. The companys predicament is compounded by ongoing efforts by Verizon Wireless to convince the court to allow it to shut the MVNO down.

The Associated Press reported that Ampd is continuing to rack up $370,000 in charges to Verizon daily, leaving it with a mere $9,000 in the coffers going into this week. The charges since filing bankruptcy a month and a half ago have accumulated to an additional $15 million or so that Ampd owes Verizon, bringing the total to more than $56 million.

The rest of the story remains to unfold, but a few details were available on Monday. A FAQ page on Ampd Web site (which continues to twinkle with offers and content showcases) says that customers will be able to take their phones to another CDMA carrier and no early termination fees will be levied. Customer service will not be available after July 23, so a collections agency will go after those with unpaid balances, prepaid minutes will be nonrefundable, and other rebates and credits must be secured by filing a claim with the bankruptcy court.

Amp’d filed a petition for Chapter 11 bankruptcy in June, blaming a lack of OSS/billing scalability for its troubles. It then became apparent that over the course of the first half of the year, about half of the MVNOs subscribers werent paying their bills. Nonetheless, the operator continued to extend postpaid plans without performing credit checks, subsidized expensive handsets, spent money on lavish television ads, took on more and more expensive content licenses and in general blew through the $360 million in investments from MTV Networks, Universal Music Group, handset partner Motorola Inc. and others, without recouping their losses.

Now, as the hangover sets in, industry watchers will wait to see who will take over the companys assets.

Ampd Mobile http://get.ampd.com
Verizon Wireless www.verizonwireless.com

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