Is Verizon wireless going to merge with Amp'd?

Question

I hear that Amp'd is using Verizon towers for their service. Does that mean in due time they'll be one with each other?

Answer 1

Probably not right away.

Amp'd is what the industry calls a Mobile Virtual Network Operator (MVNO). They buy airtime from an established network operator like VZW and packages services for a specific audience. In Amp'ds case, it's teens and young adults.

Companies like VZW and Sprint like these MVNOs because those companies cater to an audience they'd not normally promote to. The MVNOs drive usage, and revenue, to the established carriers. The MVNOs make money when they are able to generate the usage from their target audience.

If the MVNO fails, the established carriers minimize their loss because they didn't plow their own money into the failed market. If the MVNO is wildly successful, the established carrier may decide to buy the MVNO, keep the subscriber base for themselves, and the MVNO investors make a boatload of money.

So it's a business model that makes sense for all sides. Except for possibly the consumer, but that's for another disclosure statement...