Solavei to Carry on Mobile Services with Merger Plan
March 18, 2015 Leave a comment
Mobile services provider Solavei LLC will merge with Netherlands-based ASPIDER, in the latest report to come out of Solavei’s bankruptcy proceedings.
ASPIDER and its Delaware-based U.S. subsidiary provide mobile infrastructure and services to mobile carriers, with a focus on driving revenue and loyalty. According to its website, ASPIDER supports 200 million subscribers worldwide. The merger will give Solavei members access to ASPIDER offerings such as “in-network” international calling, global roaming and mobile payments.
Solavei Chairman and CEO Ryan Wuerch, who will continue in his role with the company, called the merger a “tremendous value” for both brands. “For Solavei, it will provide the opportunity to leverage ASPIDER direct connections with global mobile operators, add technology resources to enhance and expand mobile services for our members, and broaden Solavei’s reach to enable us to rapidly expand the Solavei brand around the world.”
In June 2014, Solavei filed a Chapter 11 bankruptcy and announced that services would continue uninterrupted as its business underwent restructuring. According to its statement, the Seattle-area company has signed on more than 400,000 people to its mobile service plans in the past two years.
Solavei’s bankruptcy filings, obtained by John Cook of GeekWire, point to the company’s commission model as the source of its woes. An unsustainable commission structure stressed the company’s working capital and liquidity, ultimately prompting Solavei to restructure.
The amount of commission payments owed to members for referrals and network building activities exceeded initial expectations. The Debtor had initially targeted and agreed to pay 50 percent of its gross profit to members in the form of commissions. However, as members found ways to maximize their commissions in ways not anticipated under the commission plan, the company was actually paying some 83 percent or more of its gross profits to members. The Debtor substantially revised the commission plan in March 2013 and again in January 2014, to bring its overall payout closer to the sustainable 50 percent level.