Mobile virtual network operator shut down abruptly on Wednesday evening, leaving up to 50,000 customers on ad-supported operator without connectivity.

Ovivo Mobile, a mobile virtual network operator, shut down without warning on Wednesday evening, leaving up to 50,000 customers unable to make phone calls, send texts or use data services.

The Ovivo Twitter and Facebook pages have been deactivated and contact information removed from the company’s official website. The site now displays only a notice that: “For reasons beyond our control, Ovivo Mobile is closing down on the evening of Wednesday 19 March 2014”, alongside a PAC code request form for customers to transfer their mobile numbers.

Founder Dariush Zand, 35, incorporated the company in September 2011. He was previously director of five other companies – two in the mobile phone industry and three consultancies – all of which are now dissolved.

According to Companies House records provided via Duedil, in September 2013 the company had cash of £10,000 and other assets of about £6,000 but liabilities of £511,000 - giving it a negative net worth of £453,000. But that month it raised £414,000 through crowdsourcing website CrowdCube in exchange for 25.48% equity.

Ovivo Mobile had an ad-funded business model, offering contracts for mobile phones and tablets for no monthly charge. The scheme relied on users having heavy internet usage, and would display an advert in their mobile browser every 10 minutes.

The zero-cost deals included calling, text and data bundles for a £20 upfront fee, £15 of which would be turned into credit balance. Extra credit could be added to allowances by topping up.

Ovivo Mobile delivered its 50,000th SIM card in January and was reportedly aiming to raise £3m this year through new users. Speaking to Mobile News earlier this month, Zand stated that “a substantial percentage” of these SIMs were active.

He commented: “We are established… Profitability from a company’s perspective means are we achieving our potential, not only are we in the black in terms of our P&L [profit and loss]. And, we are not achieving our potential yet because the potential is so huge.”

Users left in the lurch are furious. Mary Horan bought an Ovivo Sim card less than a month ago, cancelling a contract that cost £5.50 a month from another network provider. She said: “I think it is outrageous that I was on the Ovivo website only yesterday and there was no warning of this. Very few people have my landline number, and I feel really frustrated that friends and family will be trying to get in touch with me and wondering why they’re being ignored.”

The company used Vodafone’s network via an MVNO aggregator, Cognatel. Speaking to MobileToday in May 2012, Cognatel’s chief executive said: “What we do is lower the barriers of entry to those that come into the marketplace. Setting up an MVNO is still a complex operation. We offer a supportive model and we work closely with our partners at every stage of their development… We take away a lot of the pain so that our MVNOs can concentrate on marketing and branding their proposition.”

CrowdCube director Luke Lang commented: “We’re extremely disappointed that Ovivo Mobile has had to announce that for reasons beyond their control, it is closing down. When Ovivo raised finance through our site the company was in a good position – with 10,000 customers and an experienced management team. However, the mobile industry is a highly competitive marketplace that is challenging for even established players, particularly during difficult economic times.”

Other Ovivo directors include David Jones who is a director of seven other companies, and the retired director of an additional 25 companies since 2000. Martin Smith and James Longley are active as directors of two and twelve companies respectively, with a total of 82 previous companies between them since the 1990s. Anthony Fish, who became a director of Ovivo Mobile in 2013, is active director of 10 other companies and has previously been director of another seven.

Ovivo Mobile offers were promoted on, with many taking advantage of the packages.

Those who need a mobile connection and shift their number are unlikely to be refunded, Ovivo’s terms and conditions suggest:

“6.3 In the event that We terminate the Service and You have paid for credit remaining on your Account We shall refund the amount to You, provided We have received the SIM Card back. Refunds will be credited to the credit or debit card used when topping-up.” [sic]

“6.6 Should You transfer your number away from OVIVO, this constitutes a termination of this Agreement and any outstanding credit on your account, whether paid for or promotional, is forfeit and non-refundable.” [sic]

Originally published by The Guardian. Image above by Anders Adermark (CC BY-NC-ND 2.0).