Mobile virtual network operators (MVNOs) have been having one hell of a time over the past year. The biggest burnout among them was Amp’d Mobile, which lost $360M before realizing its customers couldn’t pay their bills.

While Helio rode high for quite some time, that company has also lost Earthlink as an investor, seen CEO Sky Dayton depart, and accumulated a deficit of $560M.

Now Sonopia, an MVNO that enabled communities and organizations to set up their own branded mobile services (so-called “mini-MVNOs”), has also shut down after failing to gain traction.

According to a former business development consultant, Sonopia’s “approach was too ‘involving’ and too ambitious, offering targeted services and campaigns for segmented groups…which often lacked skills in running even a marketing program, let alone a mobile service.” Apparently the inflexibility of Verizon, its parent carrier, and the over-zealous optimism of founder Juha Christensen also led the company to ruin.

Sonopia is now in the TechCrunch DeadPool.

Prexar Mobile has secured the right to offer contract-free monthly plans to former Amp’d customers who, until now, had to choose between switching to Verizon or using their phones as decorative lumps of useless crap.

Currently, service is voice-only but Prexar is hinting that it’ll be working on offering more services once everybody’s on board.

Bill Fogg, CEO of United Systems Access (Prexar’s parent company) says, “We want to give customers a soft landing…We don’t have as robust an offering as Amp’d Mobile yet, but at least they’ll be able to keep their voice service, which for many is the only means of communication they have.”

More information and signup options at www.prexarmobile.com.

Amp’d Mobile offers option [Los Angeles Times]

Matt Marshall at Venture Beat has the scoop on what the Amp’d team were spending part of their $360 million in venture capital on: porn.

According to the asset list from the Apm’d fire sale, the company acquired at least 100 porn DVDs; least that’s the number listed for the auction (we’d presume additional DVD’s were probably taken home).

As Matt put it so well “We’re still wondering how venture investors such as Redpoint (which lost $25 million in this) and Highland (which lost $50 million) could have let this happen.”

Amp’d declared bankruptcy June 2 owing $100 million.

Full coverage of the Amp’d meltdown on TechCrunch here.

UPDATE: A correction printed at Venture Beat notes that these might not have been DVD’s, but some sort of X rated content Amp’d produced, they look like DVD’s and certainly we are unwilling to repeat the names of them here to prove the point. Aside from the still very valid questions about how Amp’d blew $360million in funding and ran up $100million in debt, there are now some interesting questions as to why a company primarily marketing to teens was producing X-Rated content.

On my way home from dinner I decided to stop by the Verizon store below my apartment to ask about an Amp’d Motorola Q in my possession. I just wanted to know if I could port an existing Verizon number to the Q. Amp’d does piggyback on Verizon’s network, so I figured I’d get a yes. The Q&A section of Amp’d’s site states that I can take my phone to another CDMA network without any fuss. This does not hold true. The customer rep told me that I wouldn’t be able to use my Q because it doesn’t have Verizon branding. WTF?! Way to charge your existing customers up the ass and spurn those new customers you could potentially be making money off of. Put another notch on the bed post. Can you hear me now, morons?

Meanwhile competitor Helio, which entered the market at about the same time as Amp’d, keeps on surging. Last week they announced that they reached 100,000 customers and have ARPU (average revenue per user) of $100 – way above the average for mobile startups.

A lot of Helio’s success can be attributed to their new Ocean, a killer dual-slider phone. I actually considered using the Ocean over the iPhone because it has a keyboard and great instant messaging support, but it doesn’t sync with Macs.

Where this leaves Amp’d Mobile’s customers isn’t so clear, but at this point it would be a good idea to consider looking for a new carrier.

[Via MobileBurn]

Peter Adderton Offically Out Of Amp’d Mobile

Could Qualcomm Scoop Up Amp’d? [Business Week]

[via Phone Scoop]

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.

The company competed with VelvetPuffin, Loopt and Helio in an attempt to deliver a compelling mobile based social networking product to a worldwide marketplace of 2.6 billion cell phone users.

According to mocoNews, Amp’d Mobile owes $33 million to Verizon Wireless, $16 million to Motorola and $10 million to Vivendi. Smaller creditors include BestBuy at $8 million and MTV Networks: $1.8 million. Total debt is more than $100 million with assets less than that figure.

Amp’d Mobile had previously taken $360 million in funding over 5 rounds. Investors include RedPoint Ventures, Highland Capital Partners and Columbia Capital.

Amp’d Mobile is now in the TechCrunch Deadpool.

A recently leaked document all but confirms the imminent launch of the Moto Q under Amp’d Mobile’s moniker. The user guide is copyrighted 2007 so the launch could be very soon.

Unfortunately, the guide doesn’t give us any more details than we already know, but Amp’d Live will offer up some tasty mobile entertainment. You’ll be able to watch your favorite shows from ABC, MTV, and Comedy Central just to name a few. Deep Indie, The Joint, MTV Radio and a slew of others will provide streaming music to your device as well. Let’s hope it’s running WinMo 6.0 for Amp’d Mobile’s sake.

User Guide [via Engadget Mobile]

These ads are the product of one of the largest technology marketing campaigns in recent memory. Unfortunately, they are nearly assuring that Helio will be a gargantuan money-losing debacle. In fact, I’d venture to say that all MVNOs (those smaller cell phone carriers such as Boost Mobile, AMPd, and Helio that essentially rent network space from another carrier) are slowly headed the way of the now-dead ESPN Mobile. And its a shame, because having more competition and consumer choice should help consumers.

But it doesn’t have to be this way. MVNOs CAN succeed, click the jump to see how…

DON’T JUST SELL AN IMAGE, SELL FEATURES

Most MVNOs are positively packed with features and content. Unfortunately, they habitually underestimate consumers’ ability to grasp words like “EV-DO” and “streaming video”, and instead continue to almost exclusively hawk their image—which is nearly always “young, hip, dude with disposable income.” How original. And, unfortunately, this marketing almost always comes out like your friend’s mom who tries too hard to be cool—it just reeks of corporate wrangling and focus groups.

Fine, we all know that Helio phones have easy access to MySpace (actually, any Web-capable phone can access the site, and Cingular has been pushing the same feature lately, but that’s another story altogether), but having that be the only point your ads emphasize (other than the fact that your phone is also a “Friendar”) essentially limits your target audience to MySpace addicts. And, of course, MySpace is SO 2004. Instead of cutesy ads that tell virtually nothing about the phones’ features, Helio and the like should market their content and wealth of features—which they do have.

And, I’m not even going to touch Boost Mobile’s “Where You At?” slogan (written in “Graffiti” font), which I find borderline offensive.

OFFER TO BUY OUT OUR CONTRACTS

It is very, very, very difficult to get people to swallow a $200 fee to switch carriers, and most consumers aren’t quite privy to contract-swapping Web sites. If MVNOs are serious about luring in people who are sick of Verizon and Cingular, they should offer to buy out their contracts. I’d be much more willing to try an MVNO if this tax were vanquished, even if it meant signing up for another contract. If I were an MVNO I’d start this out as a 30-day promotion—the free publicity alone would more than pay for the cost.

OFFER MORE HANDSET OPTIONS

One of the selling points of MVNOs is that they bring Korea-style handsets to America. Cool. Except when you have an option of one or two phones, which are essentially two-year old Korean models, it kinda kills the appeal. It’s a shame too, because our Korean friends have literally hundreds, if not thousands, of handsets to choose from. The MVNOs should throw a catalogue of all these not-seen-in-America phones on their Web sites, charge a modest import fee, and open up their networks to them. The ads will nearly write themselves: “For years, Koreans have had access to loads of feature-packed phones that never see the light of day in America. Until now.” Wham bam, a million sales ma’am.

Seth Porges writes on future technology and its role in personal electronics for his column, The Futurist. It appears every Thursday and an archive of past columns is available here.

We just received an anonymous tip on Amp’d Mobile, claiming the youth-oriented network is planning on leveraging its hybrid pricing plans to become the first MVNO to offer smartphones. While this sounds like bullpucky at first, the tipster included these photos (that appear to be real) of what looks like an Amp’d-branded Motorola Q. That got our attention.

While it’s known that Amp’d has love for Moto, this is completely out of left field. If true, however, it’s not just exciting news to the network’s customers, but also a sign of the coming of the “casual smartphone user,” as smartphones move out of the office and into the hands of soccer moms and NASCAR dads across the country.

The tipster, sadly, has no stats for the Amp’d Q (which will probably have another name if and when it’s launched), but it’s likely to be the same as the Verizon version, running Windows Mobile 5: Smartphone Edition, though the photos don’t show the operating system, so this isn’t for sure.

‘Nother pic after the drop.

]]> http://techcrunch.com/2006/11/09/ampd-mobile-to-launch-smartphones-starting-with-motorola-q/feed/ 0 mattoly