Amp'd Revenue Soars, But Subscriptions Lag
- by Mark Walsh @markfwal, September 19, 2006
Amp'd, a mobile virtual network operator, or MVNO, also said it was generating more than $100 a month in average revenue per use--double the national carriers' average.
Amp'd is among a group of high-end MVNOs introduced in the last year, including Helio and ESPN Mobile, that have struggled to gain subscribers despite offering loads of multimedia content. Disney President and CEO Robert Iger, for instance, recently admitted that ESPN Mobile's results so far had not lived up to expectations.
Virgin Mobile USA is generally viewed as the most successful virtual carrier to date, with more than 4 million subscribers. After launching in 2002, the prepaid service hit the 1 million customer mark within a year and a half.
"To be fair, it's been about nine months since [Amp'd] launched. But if they can replicate or come close to the ramp that Virgin Mobile did, then it means something," said William Ho, a senior wireless services analyst at technology research firm Current Analysis.
But Ho also noted that Amp'd and newer MVNOs face increased competition now for youthful consumers from each other and the major wireless carriers. Unlike Virgin Mobile, the new crop of virtual operators also mostly require contracts, making it tougher to sign up new customers.
However, Ho noted that Amp'd's $100 in average revenue per user was a healthy sign. "This may adjust over time but if it continues, it validates Amp'd's compelling content and unlimited data story," he said.
L.A.-based Amp'd, which has received some $250 million in venture funding to date, features mobile media from MTV, Universal Music Group, NBC, and Fox, among others.
Last week, the company announced that Procter & Gamble's Herbal Essences brand would begin running video ads on its Overdrive video on-demand service and Amp'd TV. The latter includes programming from A&E, the History Channel and MTV.
