Amp'd files for chapter 11 bankruptcy

We wish we could say we're surprised -- ok fine, we're always a little surprised when a company files for bankruptcy -- but it looks like Amp'd Mobile has filed chapter 11. We know the business has almost 200k subscribers, but apparently the business "couldn't keep up with the growth" -- but since when does growth and consumer interest in an MVNO's service equal business-rattling financial problems? Sounds like something weird is going on, but remember, chapter 11 just means down, not out. (Unlike the entirely out MobileESPN.) In other words, don't be surprised if Amp'd gets its business back in order and makes a triumphant return to the market -- or, you know, goes out of business entirely. [Warning: subscription req'd for link]

Update: mocoNews has some more info on the filing, including how much money Amp'd owes who; Amp'd also sent us an official statement on the bankruptcy filing, which is posted after the break.

OFFICIAL STATEMENT FROM AMP'D MOBILE

On June 1st, 2007, Amp'd Mobile Inc. filed for protection under Chapter 11 bankruptcy to restructure the business. As a result of our rapid growth, our back-end infrastructure was unable to keep up with customer demand. We are taking this step as a necessary and responsible action to sustain and strengthen our momentum in the market place.

We expect to continue normal business operations throughout the reorganization process. We are confident that we will emerge from this stronger than ever for the following reasons:

The strength of Amp'd Mobile's brand and high customer demand for the product.

During the reorganization process, we are working with one of Amp'd Mobile's largest investors to obtain debtor-in-possession financing. Our investor supports our vision, strategic direction and business plan.

Amp'd Mobile's senior management team remains largely intact as we continue to focus on improving and scaling our backend infrastructure.

We are committed to assuring Amp'd Mobile services remain uninterrupted and will continue to provide our customers with the best service possible.

[Paul @ Jun 2nd 2007 9:24PM]

lol now i dont have to hear someone screaming AMP'D!!!!!!! after the commercal

[Conjecture McSpeculate @ Jun 2nd 2007 11:03PM]

now you'll just hear

BANKRUPT'D!

[Stan Winstone @ Jun 2nd 2007 9:44PM]

Chapter 11 means get another cell provider- pronto...

[Paul J. @ Jun 2nd 2007 9:46PM]

If they actually do go out of business, what happens to people that have an unlimited calling plan? My understanding of similar situations is that the parent provider (Verizon) would take over the service contract, so would you essentially get unlimited minutes with Verizon for the price you were paying Ampd?

[ampd master @ Jun 3rd 2007 1:44AM]

doubtfull

[John Stracke @ Jun 4th 2007 10:55AM]

"If they actually do go out of business, what happens to people that have an unlimited calling plan?" That's up to the bankruptcy court. You file for bankruptcy when you can't honor all your contracts; the court then decides which contracts get honored, and by how much. Remember when etoys went bankrupt and sold their customer list, which they had promised never to do? That promise was a contract, but the court decided that paying their debtors was more important than protecting people's privacy.

[Cupajo @ Jun 2nd 2007 9:46PM]

Does this mean I don't have to watch the commercial where the guy is dry-humping his phone anymore?

[Adrian Williams @ Jun 2nd 2007 9:49PM]

Boost is next along with Sprint going to Comcast

[dcny @ Jun 2nd 2007 9:53PM]

I expected helio to go first, have never never seen anyone with a helio i have seen about 100 people with amp's phones no helio though.


Helio is way over priced Ampd was pretty cheap compared to others

[Ryhan @ Jun 3rd 2007 5:47PM]

Helio is still afloat becauseit has an admittedly great product; the ocean, and keeps the price high.

Ampd comparitiely had very little to offer except for "lower" prices, content for tweens/teens, and awkward ads. :)

[mikal @ Jun 2nd 2007 10:21PM]

ok now this makes sense.... i worked for a licensed distributor and hadnt been paid for a month and a half. i lost out on 2.5k and i was thinking that i was just my employer trying to stiff me when in fact. it was amp'd. only problem was that they gave me so much run around that i figured they were just performing an elaborate scam. crud. looks like im out 2.5k. oh well. im stil going to take em to court.

[gerbick @ Jun 2nd 2007 10:48PM]

Has there ever been a successful MVNO service provider?

[dcny @ Jun 2nd 2007 11:47PM]

America Movil & its subsidary Net 10 & Tracfone Wireless they've been in business for years since i was about 5

[John Doe @ Jun 3rd 2007 12:09AM]

Virgin mobile
but i don't think theres any successful non-budget mvnos

[Nate @ Jun 2nd 2007 11:27PM]

or as said by another engadget mobile poster


fuck'd

[Jeremy K. @ Jun 3rd 2007 12:13AM]

Well........ with a name like Amp'd, what'd you expect?

[alexander @ Jun 3rd 2007 12:17AM]

No it's true - explosive growth can lead directly to bankruptcy. Say you charge people $30 / month to use your service, but each new customer is costing you $20 to acquire (average cost of advertising and paperwork spread over all new customers) and incurring another $20 in costs to you per month... at that rate you don't break even on new subscribers until after two months of service. And should there be a spike in subscriptions you may even run out of cash.

Although in this case I'd say they're *cough* exaggerating growth to put the best face possible on things. But that's an uninformed take on the situation, heck, they could even be telling the truth.

[ampd master @ Jul 3rd 2007 3:45PM]

they were good at selling phones not collecting from customers

[Big @ Jun 3rd 2007 12:40AM]

BOOST MOBILE is the problem. Right now it is probably the BEST cellular pre-pay provider out there. Mostly because of the I875 and I880 phones.

I never expected AMP'D to be doing so poorly but then again, who is really gonna buy a cellphone to watch downloads of old has-been MTV shows

Beavis and Butthead is available on DVD now.

[Mike Uram @ Jun 3rd 2007 1:06AM]

Now I guess no one will call it a phone...company.

[ampd master @ Jun 3rd 2007 1:44AM]

dude thats helios line not ampds...

[ampd master @ Jun 3rd 2007 1:43AM]

I own one of there largest distributors... bottom line great product poor management team... but… I do not think you have heard the last from these guys... just the idiots they had in charge.

[Yojimbo @ Jun 3rd 2007 7:22AM]

What planet are you from and or what drugs are you taking? (No sharing, please)

[Jamar @ Jun 3rd 2007 9:06AM]

Now to hope that Helio doesn't do the same thing. Or, for that matter, KDDI Mobile. I feel that they haven't shown their full capabilities yet, and they'll become more like their parent companies and wow us all.

[MinceyFresh @ Jun 3rd 2007 11:58AM]

Jamar: amen to that!

[Digger @ Jun 3rd 2007 12:56PM]

Which MVNO do you think has better chance of survival ?. Is Disney a good bet ?. I heard Virgin is not doing very well either.

[just.Rob @ Jun 3rd 2007 1:34PM]

from what i understand, both virgin and helio are thinking about going public... and selling stock could have an extremely positive effect on business

[warren.colbert @ Jun 3rd 2007 10:17PM]

how long till Boost follows?

[Michael Brown @ Jun 6th 2007 11:25PM]

Amp'd mobile tried to expand in a market unable to provide the revenue it needed to meet its obligations. The outsourcing of customer care to a company that consistently provided 50 minute wait times and uninformed representaives along with a failed billing system cut it out of the market for quality customers. People who pay consistently tend to like a high level of service.

Leaving Amp'd to choose growth without a sound financial risk management program in place (open credit approvals), leaving them with a delinquency rate of 50%, unheard of by any business standards. This can only be accomplished through bad management. Amp'd will try to blame it's customer base for managements failing, but the truth is Amp'd was a good idea in the hands of incapable people.

Amp'd will be absorbed by one of its competitors, more than likely Verizon, but don't close the door on Sprint/Nextel another management team incapable of addressing customer needs but they are smart enough to manage financial risk.

[matty g @ Jun 29th 2007 3:02PM]

don't buy amp'd. you should go to verizon where they are a corporate giant and have something called "infrastructure"..amazing concept! really, you pay more, but it's worth every penny
-real customer

[nimblewit @ Jul 2nd 2007 5:50PM]

Now what about those rebates from AMPD? Do we need lawyers to get our money from them to be listed in the chapter 11?

[April @ Jul 12th 2007 5:03AM]

I am an AMP'D customer and they are great. It just takes along time to get them on the phone.