01:45 PM

Amp'd Mobile Files For Bankruptcy Protection

Subscribers shouldn't panic just yet. Amp'd Mobile will continue normal business operations during the reorganization process.

Amp'd Mobile, a youth-focused Mobile Virtual Network Operator (MVNO), on Monday said it filed for Chapter 11 bankruptcy protection.

The company, which licenses spectrum from cellular carrier Verizon Wireless and resells cell phone services that include music, video, and entertainment content, issued a statement saying its "backend infrastructure was unable to keep up with customer demand" because of the company's rapid growth. Filing for bankruptcy is a necessary action to sustain momentum in the marketplace, Amp'd Mobile said.

Amp'd Mobile loses 7% to 8% of its subscribers each month, according to Levick Strategic Communications, a crisis management firm based in Washington, D.C.

Subscribers shouldn't panic just yet. Amp'd Mobile will continue normal business operations during the reorganization process. The reorganization process includes tapping investors for financing and improving the company's backend infrastructure.

An MVNO can generate millions of subscribers and enjoy success selling customized services to a targeted group of people, as is the case with Virgin Mobile. The company launched its service in July 2002 and uses Sprint's cellular network to offer pay-as-you-go services. Like Amp'd Mobile, Virgin Mobile also targets the youth.

But often trendy multimedia cell phones and entertainment content are not enough for MVNOs to thrive. After being in business for less than a year, Disney in April shut down Mobile ESPN on Sprint's network in pursuit of a different nationwide wireless carrier. Mobile ESPN was re-launched as ESPN MVP last month on Verizon Wireless' network and is now only available to Verizon Wireless subscribers that have V Cast-capable cell phones.

Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
2014 Next-Gen WAN Survey
2014 Next-Gen WAN Survey
While 68% say demand for WAN bandwidth will increase, just 15% are in the process of bringing new services or more capacity online now. For 26%, cost is the problem. Enter vendors from Aryaka to Cisco to Pertino, all looking to use cloud to transform how IT delivers wide-area connectivity.
Register for InformationWeek Newsletters
White Papers
Current Issue
Top IT Trends to Watch in Financial Services
IT pros at banks, investment houses, insurance companies, and other financial services organizations are focused on a range of issues, from peer-to-peer lending to cybersecurity to performance, agility, and compliance. It all matters.
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
Join us for a roundup of the top stories on for the week of July 17, 2016. We'll be talking with the editors and correspondents who brought you the top stories of the week to get the "story behind the story."
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.