Amp’d – Rectif’d

So, it looks as if the Amp’d investors who pumped in $360m have decided to throw in the towel and file for bankruptcy. Amp’d themselves are claiming not all is lost and they plan to continue the good fight. I would suspect that the whole future of Amp’d is now in the hands of its biggest creditor and airtime provider, Verizon Wireless, who is listed at being owed US$33m. A normal MVNO agreement will have clauses to deal with bankruptcy and basically it shouldn't be looking good for Amp’d. I expect to see Verizon Wireless picking up the customer base and brand for literally microcents on the dollar. In the absence of new money, realistically it will be a Verizon Wireless decision whether to continue the brand by beefing up the backoffice and distribution by integrating Amp'd into Verizon Wireless.

In the wider scheme of things it is hardly surprising and something, MVNO doommeister, Telebusillis has been publicly predicting since last year. The big question now is what will happen to the other three reasonably sized USA MVNOs:

• Virgin Mobile USA – the ipo has been filed and they need a cash injection. The failure of amp’d will probably mean the ipo will be much more difficult to get away at a reasonable price.

• Helio – the next financing of this amp’d lookalike is probably only just around the corner and the appetite from the owners, SK Telecom and Earthlink, is probably going to be seriously tested.

• Tracfone is probably the only MVNO in the USA making any money and therefore is not under any short term pressure. The owner, Americas Movil, is also bigger than most players in US telecoms and has by far the deepest pockets of any MVNO owner. It owns the #1 mobile network in Latin America and therefore understands the wireless game better than most. Personally, I guess there will be quite a few people in Mexico City studying how to transform Tracfone from a MVNO to a MNO with an appropriate acquisition or two.