According to AP reports, Verizon Wireless is really ready to pull the plug on MVNO partner Amp’d this time. Verizon says Amp’d is using $370,000 worth of Verizon’s services every day and that Amp’d will have just $9,000 in the bank by Monday. Time to dial Amp’d down to “0″?
To continue the amplifier analogy, Amp’d Mobile pulled a total Spinal Tap. It operated at the highest gain setting, pumping up the volume to “11″ without enough juice backing up the transformer.
The result? It blew its power tubes. In other words, it has burned through nearly all its cash and Verizon has had enough of the noise.
Verizon says Amp’d has not secured a bankruptcy loan to secure its debts after 46 days in Chapter 11 protection.
The $370,000-a-day charges to keep its operations going has boosted Amp’d’s debt to Verizon by another $15.6 million. That makes the total owed to Verizon Wireless alone over $56 million.
Amp’d owes other partners, such as Motorola, as well. The $9,000 in cash it will have on hand come Monday falls shot by more than a few decimal points.
Matters came to a head in early June when Verizon threatened to turn off Amp’d’s service over nonpayment issues.
Amp’d said at the time that it was churning 7% to 8% of its customers every month and had over 80,000 non-paying customers, leaving it strapped for cash. It also burned through over $350 million of investor money in the last 4 years.
Verizon is petitioning the judge overseeing the case to let it shut the MVNO down because Amp’d has offered no proof that it can pay any portion of the debts owed.
As sad as it is to see any company bite the dust, no one can blame Verizon for wanting to unplug Amp’d.
October 3rd, 2008
5 Comments at "Is Amp’d Mobile’s Gig Coming To An End?"
Wow, good thing I never got around to getting that fancy Amp’d pay-as-you-go phone I’d thought about. On the other hand, those were only advertised for about two weeks, so who knows if there was actually anything to that service plan…
I thought they were already bankrupt, and started to fold a couple of weeks ago…
That one commercial where the guy makes the big guy and the old guy fight really sucked, too. I feel sorry for whoever thought of “Amp’d”
@Luke: What gets me is $370,000 worth of Verizon’s services being used every day.
That’s just a crazy amount of money.
At any rate, you should stay away from CDMA based phones and service if you want future expandability.
Cingular/AT&T and T-Mobile have really nice coverage, sexy phones and are GSM based.
Kick it up a notch and go with a quad-band world phone and you can roam all over the place.
SIM card based phones are quite lovely
Sean, who knows what’ll be available by the time I’m no longer a penniless, unemployed college student. Let’s talk in three years, see what the fun and sexy gadgets are then.
I had Amp’d Mobile since pretty much the beginning, I was getting free tv on it and radio, songs were only 99 cents, good times all around for me, but maybe thats why their out of cash now…
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