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Publication Date: June 2007
ANALYSIS SUMMARY
Last week, Amp’d Mobile filed for bankruptcy protection in a US court, becoming the latest MVNO to teeter on the brink of collapse. Amp’d has been one of the most innovative players in the US mobile market, with its push of high-end data services and pricing packages more aggressive than the norm (e.g., $0.99 for music tracks). At the time of the Chapter 11 filing, the company’s user base was estimated at about 200,000. The company had also stated that its average revenue per user was higher than $100, at least 30% of which was generated by mobile data services. Its main creditor was Verizon, its network partner, to which Amp’d owed an estimated $33m.
Coming nearly a year after Mobile ESPN closed shop, the filing appears to confirm the demise of the MVNO business model in the US market. Helio may be next, depending on how patient its shareholders are. To be sure, we’ve long been skeptical of this particular iteration of the MVNO model, for reasons outlined below. Yet, we do not believe, tempting though it may be, that the bankruptcy of Amp’d is a sign of an MVNO apocalypse. We argue that it is a mistake to lump Amp’d and Virgin Mobile USA in the same category. The demise of Amp’d is just part of a normal evolution, one in which the excesses of the model are being flushed out to give way to a more realistic model, MVNO 3.0.
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