A Tale of Two Companies

A U.K mobile search engine company* recently announced that the U.S. has seen a dramatic increase in mobile Web usage – 3x over the previously tracked 12 months.

The growth in mobile usage is attributed to the flat-rate mobile data plans offered by major U.S. mobile carriers. And of course the novelty of texting that hit U.S.shores about 12 months ago.

Additional growth will come from mobile users who find compelling mobile applications (not much money to be made in the drive to offer unlimited SMS alone) and convenience.

2 companies – both using an MVNO model - focused on going after these twin drivers. Amp’d targeted new mobile apps, services and content while Pivot, a JV between cable operators and Sprint, focused on convenience by providing “quadruple-play” services (digital TV, high speed Internet, phone service, and now mobile service).

Amp’d filed for bankruptcy this week. Too early to tell how Pivot will do.

The preliminary intelligence on Amp’d indicates that they ran into collection problems. If their customers were primarily made up of the younger set, then financial wherewithal is the culprit, not necessarily the idea of a demographically-targeted mobile service provider. Nor has there been anything to indicate that poor service or quality was at issue (Amp’d leases access to Verizon’s network). Companies can emerge from bankruptcy so the final chapter hasn’t been written yet on this (to-date) $360 million venture.

Pivot is bringing together a lot of strength on the distribution side. The 3 cable companies that are part of this JV essentially have access to every U.S. household. Will the allure of 1-stop shopping convenience work in switching over customers who are already using another mobile service? The companies are hedging their bets and each one is pushing not just convenience but innovative mobile offerings such as “made-for-mobile” TV programming.  Now the question is how effectively are these services being delivered and will they be enough to cut down the industry's churn rate.

* www.bango.com