Amp'd Mobile Files For Bankruptcy Protection

Highlighting the struggles that mobile virtual network operators face to break into the highly competitive cellular marker, Amp'd Mobile filed for Chapter 11 bankruptcy protection over the weekend.

Amp'd claims the bankruptcy was due to the fact its infrastructure could not keep up with demand, and it was "a necessary and responsible action to sustain and strengthen our momentum in the marketplace."

During its restructuring, the company plans to continue operations while working on getting its debt under control. Additionally, the company said its senior management will largely stay intact.

"We are committed to assuring Amp'd Mobile services remain uninterrupted and will continue to provide our customers with the best service possible," the company said in a statement on Sunday.

Turning a profit in the MVNO industry is tough. After paying a carrier such as Verizon or Sprint to lease its towers, the company usually must charge a higher rate than most typical carriers. To offset this cost, MVNO normally offer some time of special service.

It does not always work. For example, ESPN Mobile shut down last year after failing to attract enough customers. It now has folded its operations into Verizon Wireless' VCAST service.

Amp'd Mobile's target demographic are younger adults with a taste for technology, offering high speed data and multimedia services.