Amp’d Mobile Inc. is “fast approaching” 50,000 subscribers and is on track to have a customer base of between 100,000 to 150,000 customers by Christmas, according to Peter Adderton, chief executive officer and founder of the mobile virtual network operator.
Adderton told RCR Wireless News that Amp’d brought in 15,000 new subscribers last month and is “on track to do 25,000 this month,” to have a total of about 50,000 customers by the end of September.
Adderton said the customer additions are predominately postpaid, and that less than 10 percent of Amp’d’s customer base is on its recently launched prepaid plans.
“Prepaid has not even stretched its legs,” he said.
The numbers provide the first look at how the MVNO is performing in terms of customers; like most recently launched MVNOs, Amp’d had until this point kept quiet about its customer numbers. However, now that Amp’d has let the cat out of the bag, Adderton urged other MVNOs to do the same.
“I call on the other MVNOs to come out and give their numbers out,” Adderton said.
He said that the current market is healthy for MVNOs, despite recent gloomy coverage from analysts and the media.
“We’ve been hearing the beat-up stories on MVNOs,” Adderton said. “It becomes the flavor of the month and everyone starts to believe it.”
Still, he admitted that things didn’t go smoothly for Amp’d at the start. The company launched last December, and Adderton said that only within the last three months were aspects such as customer care where they needed to be.
“We had a lot of bugs inside the company that we needed to get sorted out,” Adderton said. That was one reason behind the MVNO’s leisurely approach to retail distribution, he said; the company didn’t want to rush into large-scale distribution until it had the kinks worked out of its systems.
“If you go into retail and you make a mistake, it’ll tarnish you forever,” Adderton said.
Amp’d launched with Internet-only distribution, but Adderton said the company’s recent expansion into retail outlets—including Best Buy stores—has helped growth expand dramatically.
Adderton said that Amp’d is seeing average postpaid revenues per user of about $100, with about $30 coming from data—figures, he said, that surprised even him.
“We never expected it to be that high,” Adderton explained. “We never expected the live video streams and the Internet radio stations and music downloads to be anywhere near where they are.”
Adderton declined to talk about specific lessons that the MVNO had learned in its early months. However, he pointed out that Amp’d had made a major shift in its marketing, going from the early ads emphasizing the brand (Tagline: “Try not to die. Amp’d Mobile is coming.”) and the content (Tagline: “Entertain Yourself.”) to a series of new ads in which young subscribers discuss how they use their phones and talk about the reach of the network and the price of the service.
While other MVNOs (read: Helio L.L.C.) are telling consumers “don’t call us a phone company,” Adderton said that consumer research Amp’d conducted revealed that consumers did want to know more clearly what the brand offered.
“The brand recognition was high, but no one really knew enough about us,” Adderton said. “The [consumer] research we did was saying, `Tell us, because we don’t know what you are.”‘
He said that the company’s focus became “Be a great phone company first, then mobile media second.”
Adderton also noted that running a privately funded MVNO differs greatly from leading one which is funded by deep-pocketed parent companies, and that Amp’d has taken the approach of raising money, meeting pre-set milestones and then going out to raise more capital—and that he’d “take the privately funded MVNO any day of the week.”
“Everyone else can afford to make 300 mistakes and spend $300 million and their parents just keep pumping money into them,” Adderton said, and added, “I think that makes you fat and lazy, quite frankly. We’re lean and mean.”
On the handset front, Adderton said that based on his days at Boost Mobile L.L.C. (which is now controlled by Sprint Nextel Corp. and exclusively uses Motorola Inc. handsets), he believes that “in order for you to succeed in this country, you have to have the Motorola product. … You’ve got to know when there’s a winner.”
Motorola and Kyocera Corp. serve as handset vendors for Amp’d, which currently has two Kyocera slider phones that differ only in color and a Motorola clamshell available for sale. All three phones are $50 after mail-in rebate with postpaid plans; the prices go up to $100 for the sliders and $150 for the flip phone for customers who choose the prepaid or hybrid plans.
Adderton acknowledged that rumors are circulating that Amp’d is working on adding a version of Motorola’s Razr and the Q smart phone to its line-up—however, he neither confirmed nor denied the grapevine gossip. But he did mention that he “still [thinks] the Razr is going to be huge this Christmas.”
Amp’d also recently added hybrid plans to its repertoire, and Adderton said that they have been “surprisingly successful so far.”
“It’s going crazy, absolutely crazy,” he added. “People that are on prepaid are stepping up to hybrid, along with people who are not too sure and want to try out Amp’d service.”
The hybrid plans involve no contract or credit check, but do require a credit or debit card so that an account can be charged every month.
Adderton also said that in terms of lessons, “The key thing for me was first of all … take research with a small grain of salt,” particularly in the area of the potential success of mobile television. Adderton said that the MVNO’s customers watched about 200,000 live video streams last month.
He also said he hopes that industry observers will realize that they shouldn’t “judge too wisely or too quickly on the MVNOs, and more importantly, on mobile TV. I think they’re going to be surprised.”
