1. MVNO’s customers have no money, MVNO go bankrupt

    Amp’d MobileIt’s widely known that MTV and Universal Music-backed MVNO Amp’d went bankrupt. What I find interesting is how 80,000 of its 165,000 customers weren’t paying. That 46%! (Plus Amp’d only has $9000 in the bank! Not good when you owe Verizon $370k per day!) Shows the challenges of targeting a younger, mobile service-hungry demographic. Also shows the challenge of charging high prices for anything mobile.

    Over the past years, people–that is Gartner, et al–have been talking about all types of mobile payments. Such a feature does make sense especially when over two thirds of America has mobile devices. With Amp’d’s customers failing it, it shows that there is no way carriers can effectively operate in the mobile payments arena. They must be supported by experienced credit-giving institutions such as banks and credit card companies (though Deutsche Telekom does have a European banking license). So don’t worry Visa, MC, and Amex, your business prospects still look ridiculously good.

    While the failure of ESPN Mobile seemed to bring on a feeling that MVNOs had business masquerading as business models, the Amp’d failure hasn’t brought out that talk. MVNOs are here to stay and are forecasted to grow to have 25% market share. Personally I don’t really care because it seems as most MVNOs are funded by big operators (Boost, Helio) which makes them just cosmetically different. MVNOs are still connected to the same networks that don’t work, have devices that aren’t really that interesting or reliable, and are run by other operator guys who don’t exactly get my confidence in their understanding customer service.

    In general, MVNOs are attractive for users because they offer unique devices and daring features (and in the mobile world, examples would be Google, MySpace, Facebook, or heck, internet). They are in turn attractive to major carriers (i.e. network owners and operators) because the operator gets more users for minimal marketing or acquisition effort. Like network operators, MVNOs require tons of capital.

    In Europe, operators are required to lease their network out at cheap, mandated rates, creating an environment for upstart MVNOs to thrive. Things are different in the US, but what is common is that one must pay. Verizon wants bankrupt Amp’d off its network immediately.

    Well anyone with Amp’d, you may want to look into alternatives. I hear Apple makes a decent phone.

    (via madh)

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