BusinessWeek shed some light on the Amp’d Mobile chapter 11 filing. It seems that while they had about 175,000 subscribers, about 80,000 of them – or almost half – were delinquent in paying their bills.
That would certainly do it. Plus, Verizon Wireless had just given them 10 days to pay a $4.5 million bill, or they were going to shut down their service.
To clarify, the way Amp’d Mobile worked is that it licensed bandwidth from Verizon. This way Amp’d could be a specialty carrier, dedicated to mobile media, without having to build out their own cellular network, something that would have sent costs into the billions.
This is how all Mobile Virtual Network Operators (MVNOs) work, such as Mobile ESPN (which also failed) and Helio (which is doing alright, mainly on the strength of their exclusive handsets.)
Amp’d Mobile Runs Out of Juice [BusinessWeek]