I linked yesterday to an Om Malik post where he talked about a new report saying that MVNOs aren’t the licenses to print money that many people think they are. The report did note that “next-generation” MVNOs, which are eschewing the low-cost, barebones model of current virtual operators in favor of offering premium services at premium prices.
One of Om’s favorite favorite MVNO whipping boys is Amp’d, which today announced a promotion to give people three months of unlimited calling if they subscribe to its $15 per month Amp’d Overload content plan. Amp’d normally sells unlimited service for $150 a month. Giving away service “worth” $450 to get people to pay $15 a month doesn’t sound like such a great idea, and would make you think they’re not attracting too many subscribers.
The idea that operators — MVNOs or otherwise — can simply offer a bunch of content and charge premium prices for service remains unproven. There are so many things for consumers to consider in choosing which service to buy, and thinking that all this supposedly great content will cause them to overlook any and every other shortcoming, as well as high prices, is naïve.
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That depends…if people take up the offer they’ll get used to unlimited calls, which means they’re more likely to “require” the highend plan, or at least a plan higher than the one they were originally going to be on.
[...] Amp’d is promoting its content by offering three months of unlimited calling minutes to subscribers who sign up for its $15 per month Amp’d Live 20-channel video plan. The unlimited voice plan normally costs $150 per month…”The promotional offer, which does not include international calling, is available to any customer who signs up for an Amp’d calling plan for $50 or more per month, then adds the Amp’d Overload video service.” Carlo at MobHappy is unimpressed with the promotion: “Giving away service “worth” $450 to get people to pay $15 a month doesn’t sound like such a great idea, and would make you think they’re not attracting too many subscribers.” It’s a good point (even if you substract the $50 for the calling plan, it’s still $300 “lost”). There are two benefits I can see to Amp’d doing this. First, if people get used to unlimited calls because they’re free they are likely to get used to talking a lot on their mobile, which means they’re likely to need a higher plan when the promotion ends. This is a fairly standard trick and has been around for a while. The other benefit is that it introduces people to Amp’d’s content — which is its main differentiating factor. People don’t say to their friends “hey, use my phone to call somebody and notice the great voice quality” but they do say “hey, look at this video of a gnarly twist on the half-pipe” (or words to that effect: I’m not a skater). So the more content people use the more word-of-mouth goes around. Carlo’s right though — it does sound like Amp’d is throwing a lot of money at consumers to get them to sign up and use content. Related stories: –Amp’d Mobile to Premiere Movie Trailer –Amp’d Goes With Novarra For Web Browsing –Amp’d To Close Another $100 Million Funding [...]