360 million dollars not enough for Amp’d June 3, 2007Posted by rajAT in Uncategorized.
Yep. Amp’d which has raised $360 million in venture capital has filled for bankruptcy. Sounds weird isn’t it. There debt was much larger than their assets and it was the sensible thing to do.
Now this development raises some questions on the business model of MVNO. As this is not the first high profile MVNO who has bitten dust. We all remember Cool.Prepaid and ESPN mobile. Helio which is still braving in the middle, all eyes are on it as how long the party will continue.
There were some stories earlier that Apple is coming up with its own MVNO. There was lots of hoopla around Disney mobile which never saw the light of the day. The main arguments that is used is if Virgin Mobile in UK is successful why can’t others be. Well ! Well !! Virgin mobile has given part of action i.e. equity to its operators. So they will make sure that its never out of business.
Sure you can lease capacity on a carrier’s network, set-up shop and market the hell out of your MVNO, but in the end you are beholden to the carrier. Where have we heard this before? In the wired phone business of course! before some dude came-up with the term MVNO, there were hundreds of resellers who would buy wholesale and sell retail. They had razor thin margins and their existence depended on the largesse of the large phone companies. MVNOs are exactly the same, and are very dependent on the carriers that own the spectrum.
So lets wait to see how this market plays out…..