08.07.2007 09:43 AM
Prexar Mobile to buy Amp’d Mobile’s assets

Wireless service provider Prexar Mobile has bought the wireless assets of Amp’d Mobile, which shut down operations last week, less than two months after filing for Chapter 11 bankruptcy protection.

In a press statement issued shortly after the deal was announced, Prexar Mobile, owned by United Systems Access Telecom/USA Telephone, asked former Amp’d users to port their mobile phones to its service, promising a “seamless transition” as well as the “same rewarding user experience they have always enjoyed.” It said most Amp’d phones would be able to work with the Prexar Mobile service.

Prexar is currently offering text-messaging plans, but not the mobile video services that were the centerpiece of the Amp’d offering, because it does not own the latter’s content catalog. A spokesperson for the company told Mobile TV Update that its initial goal is to provide basic communications services to users who have been stranded without any type of service. The spokesperson added that the company was working on a longer-term plan for content delivery, but could not offer more details.

Former Amp’d Mobile users were scrambling last week to get on to new service plans using their existing phones before the company officially shut down the service at midnight, July 31. Many had reportedly moved to Verizon Wireless, the company that provided the wireless network for Amp’d.

Amp’d Mobile filed for Chapter 11 bankruptcy on June 1. At that time, it was approximately $100 million in debt, $33 million of which was owed to Verizon Wireless, which was threatening to kick subscribers off the network. Amp’d responded by filing a lawsuit against Verizon to prevent such an action, but dropped it when a judge ruled that it could continue to use the network while reorganizing under Chapter 11 protection if it paid down $2.5 million of its debt.

This action, however, was apparently not enough to save Amp’d, which had already racked up an additional $10 million in debt for using the Verizon network in June. It sent subscribers a text message in mid-July warning that the service might be disconnected on July 24, and then extended that deadline to July 31. It began auctioning off its assets the same day.

Amp’d’s bankruptcy filings showed that 40 percent of its reported 200,000 users were behind in payments. Meanwhile, Prexar has made it clear on its Web site that it will not offer any pre-paid service plans.

For more information, visit www.prexarmobile.com.

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