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Wireless - Sunday, June 3, 2007

Amp'd Goes Belly Up

Amp'd Mobile's bankruptcy is the largest tech venture failure that we have encountered in ages. The Los Angeles based mobile service provider claims debts of over $100M. These debts were suffered despite the company having raised $360M from investors.

If you haven't been foloowing Amp'd and having seen their TV commercials, this is a MVNO that sits on top of a wireless service, targets a young audience and layers on targeted content and marketing. The trouble with these services is that the mobile companies are so adept at retention. They stick you with horendous switching fees if you want to leave + they give you the carot of free calls within your network. so even if the Amp'd Mobile commercial was very compelling to you, your switching cost is tough to overcome. This is just common sense that for whatever reason Amp'd investors and founders chose to ignore.

The company says that in fact it has not gone belly up but is just restructuring to better deal with its rapid rate of growth but common people, it's time to face the music.

Say what you will about the week business models of Web 2.0, they typically are able to substain themselves. Whereas hardware, networking and wireless companies have a much bigger chance of flaming out.

Read - Amp’d Bankruptcy Filing: Verizon Wireless Largest Creditor With $33 Million (Moco News)