Amp'd Mobile Bankruptcy Costing Verizon $370,000 A Day

Amp’d mobile declared bankruptcy after nearly 1/2 of their customers did not pay their bills. Now Verizon, the company the leases Amp’d its network space, is petitioning the court to let them cut service to Amp’d’s remaining customers.
From RCR Wireless News:

Verizon Wireless said that as of June 23, Amp’d Mobile had incurred $15.6 million in post-bankruptcy charges and is costing the carrier $370,000 a day, but still has not obtained debtor-in-possession financing that would assure the carrier that its bills will be paid. Verizon Wireless said it has received one payment of $2.5 million, which was supposed to placate the operator and allow Amp’d Mobile to have continued access to its network.

At the time of the bankruptcy filing, Amp’d had already run up $41 million in unpaid bills to Verizon, in addition to the aforementioned $15.6 million.The Pioneer Press reports that Amp’d has about $9,000 in cash. This means that you are likely richer than Amp’d mobile.

Amp’d marketed their services to low income/young/credit risk customers who were otherwise unable to get a nonpre-paid cellphone. It did not work. At all.

VZW’s Q2 growth hit by Amp’d write-off [RCR Wireless] (Thanks, Rob!)
Amp’d may be shut off [Pioneer Press]

PREVIOUSLY: Amp’d Mobile Files For Bankruptcy After 1/2 Of Their Subscribers Don’t Pay Their Bills

Comments

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  1. dbeahn says:

    I’m still trying to understand why Verizon would make a deal with Amp’d given that Amp’d was signing up ONLY customers that Verizon WOULDN’T give an account to without an $800 deposit.

    You’d think Verizon would have at least LOOKED at Amp’d’s business plan first.

    Guess Verizon got what they asked for…

  2. doormat says:

    I think Verizon is going to be requiring any MVNO to screen their customers so they dont go through this again.

  3. TechnoDestructo says:

    Amp’d customers are going to start getting Verizon bills.

  4. scoobydoo says:

    @doormat: I think Verizon would be better off screening their MVNO’s first. How amp’d was able to get this much debt on their network without alarm bells ringing is beyond me.

  5. Hawk07 says:

    I’ve never given a dime to the Verizon corporation, but I’m sure this is like karma for consumers who have been screwed over by them.

  6. factotum says:

    There goes the sub-prime cell phone industry!

  7. Major-General says:

    @scoobydoo: Remember Iridium? Motorola took what, $5 billion in charges related to their failure.

    But frankly, if amp’d only has about nine grand, I do have a higher net worth.

  8. ivieso says:

    ampd has all these big celebrities on their tv ads. Thats where all the money went. I think I can run a better phone company from my closet than ampd mobile.

  9. pinkbunnyslippers says:

    Wait a second…a cell phone company who makes its livelihood off of people who couldn’t afford to pay attention is actually going out of business? Because nobody paid their bills?

    Get out of town!

    Here’s your sign…

  10. FLConsumer says:

    Nice to watch Verizon finally get a bit of a screwing over… maybe they’ll realize this is what it feels like to be one of their customers — screwed.

  11. justarep says:

    I almost feel bad for Verizon.

    But not quite.

  12. Trick says:

    I’m all for Verizon getting screwed but do you really think they are going to lose this money? You Verizon customers will just be squeezed that much more to pay for the deadbeats at Amp’d.

    Three cheers for the idiot MTV crowd who can’t pay their bills!!!

  13. InThrees says:

    I think the “losing $370,000 per day” figure reflects more of a “loss of opportunity for $370,000 income and sure there are some actual hard costs in there too”… but I doubt seriously that it COST Verizon $1,000,000 every 3 days to allow Amp’d access to their infrastructure.

    This has GOT to be a case of “Amp’d is racking up this bill that we know they can’t pay.” and not “Amp’d is bleeding dollars out of our holdings.”

  14. Ncisfan says:

    I knew Amp’d would fail since it started. most of the people I go to school with haven’t even herd of it not to mention their ad’s are more redundant and boring than those 1980′s drug PSAs

  15. Ncisfan says:

    @Ncisfan: except the first couple that aired when they first started [www.youtube.com]
    [www.youtube.com]
    [www.youtube.com]

  16. gibwar says:

    I always figured something like this would happen – I’ve never trusted their commercials. It’ll be interesting to see what happens to them now!

  17. enm4r says:

    Why do they have to have permission to cut Amp’d users? Why are they obligated to pick up the slack at all?

  18. Morgan says:

    Seconding Enm4r’s question. If Amp is violating their contract by not paying, surely Verizon is no longer obligated to provide the service their contract with Amp would obligate them to.

  19. adamondi says:

    I take sadistic pleasure in watching Amp’d go down in flames, and catch Verizon on fire as collateral damage.

    For future reference, Verizon, don’t make any deals or sign any contracts with a company that uses an apostrophe in place of an “e” in its name.

  20. IC18 says:

    Wooho, I am richer than Amp’d, now how much more do I need to surpass “Verizion”.

  21. randomizer9 says:

    Sounds like somebody didn’t learn their history:

    A few years ago, Mitsubishi Motors “sold” loads of vehicles in the US at 0 percent down, 0 percent interest, and 0 payments deferred for 12 months. Free car for a year, yay!

    A year later, they discover that *surprise surprise* alot of those folks buying the cars couldn’t make the payments, and had to eat a 454 million dollar loss…but at least they’re still in business!!

  22. skatha777 says:

    I had ampd and it was a clusterfuck. The billing didn’t make since. Nothing worked. It was inconvenient as all hell to pay the bills. They would shut off my fone before I even got the bill to pay it. They wouldn’t even notify me that it was shut off. No bullshit my fone was cut off consistently every 3 weeks. Then I had to use a hard line to call in and find out what was wrong because I couldn’t call ampd when it was off. Ampd may have had less then desirable clientèle but they definitely didn’t have their shit together and it was by far THE WORST EXPERIENCE I ever had with a fone. The customer service was wretched, too.

  23. bravesfan0690 says:

    I’ll admit I actually had ampd. And, no, I haven’t paid my bill. But it’s due to the fact that they have no clue what they’re doing in their billing department and want to charge me for 2 months of service that I didn’t use cause my phone got wet and then I had to wait for it to come in off back order. For the irony, I now have verizon. I’m very happy with them (for no. Seems a lot of you have had a bad expearance). But Skatha777 hit the nail on the head. It was the first sell phone I had that was incovenient. But as soon as they get my bill straight (going on 4 months now) I will gladly pay what I owe. Key word is owe. Refuse to pay them a DIME more than I am spost to. And forget calling cust service. You will wait for not less than 15-20. Very bad. Glad they are going do the crapper. Reception sucked also.

  24. “credit risk customers”

    Problem found.