Apparently, those free-spending youths don’t care much for paying their cell-phone bills. A court motion filed on June 4 explains that Amp’d “experienced an unprecedented growth of subscribers” between November, 2006, and February after running ads on MTV (VIA) about the wireless phone company’s lineup of mobile music and video content.
Collecting payments from these subscribers proved to be a challenge, however. “Approximately 90% of the debtor’s customers were on 18-month service contracts,” according to the filing. “The debtor began to find a host of credit and collections problems (that) contributed ultimately to a liquidity crisis.” By May, the number of nonpaying customers reached 80,000. That’s nearly half of Amp’d’s current customer base of 175,000 subscribers.
The filing in U.S. Bankruptcy Court in Delaware, which says the company owes more than $100 million to creditors, marks another setback for the fledgling market of “virtual” cell companies that lease network capacity from the nation’s big wireless operators to reach purportedly underserved market segments.
Well, we’re just f*cking shocked that the customers who responded to the above nicotine-voiced pitchwoman were deadbeats who don’t pay their bills. Stunned, even. Who on earth could have predicted this? And can someone get that poor girl a coffee? She’s not driving is she?—MEGHANN MARCO
Amp’d Mobile Runs Out of Juice [Businessweek] (Thanks, Ben!)