As noted in this article and my recent post on the subject, the bankruptcy of hip/hot cell phone company Amp’d Mobile could have far-reaching implications for this niche industry. Here is what was noted in that blog
Hypergrowth Not To Blame. On June 1st, Amp’d filed for Chapter 11 citing growth as a disruptive element to their back-end infrastructure. In the days following, a more complicated picture emerged though, implicating Verizon Wireless, the carrier from which Amp’d bought network time at wholesale, in a strong-arm scheme to recover more than $30 million in back payments.
One of a Kind of First of its Kind? According to its Chapter 11 documents, Amp’d’s problem wasn’t a lack of customers (it reportedly had about 200,000) – it was that the customers weren’t paying. Instead a full 40% of its subscribers had missed payments amounting to roughly $2 million, or a month’s payroll. In short, the real cause of the Amp’d meltdown was good old fashioned red-blooded American mismanagement and capitalist greed. Not to mention poor customer credit screening. The real question is whether these factors will play a part in the fortunes of all such players, or whether Amp’d was an orphan – a lone gunman, an outlier – or whether it was merely the first salvo in an oncoming landslide.
Can Amp’d Get a Better Signal? Could Amp’d recover? Possibly. Short answer ‘Yes’ with an if … long answer ‘No’ with a but. To stay competitive Amp’d will have to deliver better pricing, better handsets and equipment, or better services in the future. Then there are the deep discounts that Amp’d will have to provide to compete with Virgin Mobile and the unique content and services it will need to stay on top of Boost Mobile and Helio.