Amp’d Mobile Inc. went dark last week, after filing for bankruptcy and being unable to raise sufficient funds to carry it through reorganization.
The company joins Mobile ESPN in the annals of failed mobile virtual network operators, and its customers were stuck with shiny paperweights and the need to quickly switch to a new wireless provider.
According to bankruptcy court filings, Amp’d Mobile had tried to preserve the option for a buyer to come to the company who could fund the company’s operational expenses long enough to cover the period between Tuesday-when Verizon Wireless wanted to cut off service-and an auction. But one never materialized, although buyers for some assets were approved by the bankruptcy judge last week.
“With respect to . the MVNO side of the business . our view is that if that termination happens that that particular component of the business is essentially dead, for all intents and purposes. Whether you can resurrect it or not, I’m not sure,” said Amp’d Mobile attorney Steven Yoder in court during a hearing on July 18. “And whether it has a lot of value or not I think there’s a lot of open debate about in the first instance.”
Meanwhile, a company called VoodooVox Inc. purchased a variety of office equipment and furniture for $16,000, and Prexar Mobile, a wireless brand from USA Telephone, gained limited access to Amp’d Mobile’s customers.
The arrangement with Prexar does not involve the sale of a customer list from the bankrupt MVNO, due to customer privacy issues. Instead, the company agreed to work with Amp’d Mobile to provide information to its remaining subscribers about the option of moving to Prexar, and Prexar agreed to pay Amp’d Mobile a fee for each former customer who transferred to Prexar’s service.
Bill Fogg, CEO of USA Telephone, said that since text messages started alerting Amp’d Mobile customers to the Prexar option, the company’s customer service centers have been “pounded” with customers signing up. The Prexar brand, which offers basic text and voice plans and bills in advance without requiring a contract, was created last summer as part of USA Telephone’s quadruple-play offering, and has slowly grown to about 15,000 wireless customers, Fogg said.
Acquiring Amp’d Mobile’s customers could boost Prexar’s plans for a nationwide brand, which was “always in the plans” for Prexar, Fogg said.
Fogg said Prexar’s goal is to help Amp’d Mobile customers retain basic communication services at first-voice and text only-and said Prexar is working on a longer-term plan to add a content delivery system. Canadian carrier Telus Corp., which had a deal to distribute Amp’d products in Canada, took a similar tack in continuing basic communications only until it can transition the customers onto packages from Telus. The Canadian carrier said in its quarterly results that the bankruptcy of Amp’d cost it around $17.8 million, including equity investment, accelerated depreciation and operations expenses.
After burning through close to $400 million, Amp’d Mobile filed for bankruptcy in June. Customer service was shut down on July 23, leaving customers with little recourse for finding answers to their questions. And unlike the demise of Mobile ESPN, during which customers had several months to transition to another carrier, the Amp’d shut-down was fast and abrupt.
Dazed and confused
John Corcoran, proprietor of a Wireless Toyz multi-carrier retail location in Tampa, Fla., said that Amp’d customers who purchased phones at his store have been coming in “dazed” and unsure of exactly what the MVNO’s cryptic text messages about possible “service disruption” meant.
“It’s been a bit of a whirlwind the last 10 days or so,” Corcoran said. However, he said that ports had been going smoothly and that customers’ frustrations with Amp’d were largely soothed by the time they walked out of the store with a new handset to play with.
“They’re going a variety of places,” Corcoran said of Amp’d customers. “It comes down to, there’s a lot of good carriers out there and . generally, we’ve been able to fit them with what works best for them. “I think a lot of them looked at [Amp’d] as ‘It was great while it lasted.’ “
However, he did add that some of the Amp’d customers who had scant credit history were finding it more difficult to sign up with a new carrier.
On HowardForums.com, Amp’d users counted down to the shut-off and checked in with each other on whether ports had gone through. Most reported success with porting and scattered to a variety of carriers: Sprint Nextel Corp., Verizon Wireless, and prepaid provider PagePlus, a Verizon Wireless reseller.
Although many of the former customers praised the company for its flat-rate data plans and low overall cost, there was plenty of grumbling about losing out on $100 refunds on handsets-as well as a number of customers reporting billing errors that worked in their favor, such as never receiving a bill for a handset purchase or receiving repeated credits on their bills.
“Thanks for being a real-life case-study for me to observe over the last 15 months,” wrote one poster. “It was neat getting to see the rise and fall of a great idea, executed poorly. If I ever decide to start my own business, I now have a textbook on what NOT to do.”
