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Amp'd Melts Down, Helio Says They Are Doing Just Fine

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Daily Crunch: Clowntime Is Over Edition

When Mobile Virtual Network Operator (MVNO) Amp’d declared bankruptcy earlier this week, a lot of people pointed to competitor Helio as the next one to fall.

There are suspicious similarities between the companies. Amp’d launched in the U.S. in December 2005. Helio entered the market just a few months later, in May 2006. Amp’d raised $360 million in capital, Helio raised $440 million from parent companies Earthlink and SK Telecom.

Amp’d claims 200,000 subscribers, and says it grew so fast that its back-end infrastructure couldn’t keep up with demand, requiring the bankruptcy filing. But Amp’d is a MVNO and uses Verizon’s cellular networks, suggesting that there may be a bigger, or at least an additional, problem. Industry insiders point to poor financial management and credit terms that were so easy that a good portion of Amp’d customers aren’t paying their bills.

I spoke to a company spokesperson for Helio today to see how they are doing. They are riding high on the launch of their new Ocean device (also pictured above), a high end dual slide phone that flips up for a number pad and sideways for a full QWERTY keyboard. They claim to have nearly 100,000 customers and are on pace to generate $130 million in revenue over the next twelve months.

Helio’s service is pretty cool (I have a couple of demo phones that I’ve tested). Integration with IM networks and MySpace is seemless. The devices are actually designed by Helio and built to their specifications, whereas Amp’d devices were off-the-shelf varieties that customers could get from any carrier.

Helio was also the first cell phone company in the U.S. to offer phones with GPS capabilities, allowing users to see where they are, get directions to places they want to go, and also see the physical location of all of their friends who use Helio. That last feature has proven to be viral, the company says. As soon as one person gets the phone, a few friends are likely to join soon thereafter.

A lot of Helio’s revenue comes from download purchases, such as music videos. Users can also gift downloads to friends, or beg them to give them one as a gift. It all results in more downloads, and more revenue for Helio.

Helio may end up with the same fate as Amp’d, but there is at least some evidence that the company may have a rosier future.

At least until the iPhone launches and puts the hurt on everyone else in the industry, that is.

For more on MVNO’s, see our coverage of Sonopia (build your own MVNO) and Google’s rumored MVNO in the UK.

See the Helio fact sheet for more.

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