Amp’d Mobile, a long-awaited cell phone service aimed at the young and hip, has officially launched after securing $50 million in new funding from MTV.

The Los Angeles-based wireless company is one of the growing number of companies looking to target young cell phone users by selling high-speed cellular services like music and videos with the help of a traditional cell phone network.

Amp’d uses Verizon’s third-generation EVDO network, and sells an Amp’d-branded handset called “Jet” for $129. On Thursday, the company started selling packaged services ranging from $29.99 for 250 voice minutes to $199 for unlimited voice minutes and a free phone.

The company said it is also offering 3 months free downloading and streaming of data content, which includes music, ringtones, entertainment video channels, and video-on-demand.

Companies like Amp’d are called mobile virtual network operators, or MVNOs, and are a way that non-wireless companies can target niche customers and get a piece of the rapidly growing mobile content market (see Cell Firms Woo Gays, Pot Heads).

According to Yankee Group, the MVNO market will be a $10.7-billion global industry by 2010.

The service is backed by Peter Adderton, the founder of the successful MVNO Boost Mobile, and targets the rapidly growing market of youth-oriented high-speed cellular services (see Q&A: Amp’d’s Peter Adderton).

But the company will also face a lot of competition from a variety of brands of wireless operators that are betting on the same market.

Sports & KidsBrands like ESPN and Disney already sell services and branded cell phones, and next year Earthlink and South Korean company SK Telecom are launching “Helio,” an MVNO offering services similar to Amp’d (see Helio Rises to Mobile Test).

Roger Entner, an analyst at Ovum, said the surge of activity in MVNOs reflected “a gold rush mentality.”

Beyond just the MVNO craze, there is also competition from the traditional cell phone companies like Verizon Wireless and Cingular that would rather sell Verizon-branded and Cingular-branded services to the youth market.

It’s an unusual position because the big cell phone operators don’t want to become dumb pipes, where the niche companies reap all the revenue and the network owner takes a small cut. At the same time, the carriers also want to leverage a popular service that could bring in sales.

Amp’d’s Mr. Adderton knows that his company is in the position of competing with the owner of the network running his services, Verizon.

Mr. Adderton said for the new MVNOs like Amp’d, “the carrier is less relevant,” and referred to Amp’d’s job as “to make the industry nervous.”

Third ScreenSelling to teenagers that want the latest music, video, and entertainment content is also a smart way to attract media companies that are searching to find ways to get the latest products to that generation.

As consumers change the way they consume media, new media forms like the Internet and mobile are gaining viewers and advertising dollars.

As cell phones become the “third screen” in consumers’ lives, mobile is becoming a platform that delivers content similar to the other two screens, the TV and the PC.

Proving that young consumers are increasingly turning to mobile for content, earlier this week MTV invested $50 million in Amp’d.

The deal also includes a joint marketing and program development between MTV and Amp’d, and will enable Amp’d to leverage brands like Comedy Central, MTV, VH1, CMT, MTV2, mtvU, TV Land, Spike TV, Logo and iFILM.

“When we began this company, partnering with MTV Networks was our No. 1 goal, not only because of their unrivaled understanding of today’s young adults, but also because we share the same goal of delivering the most original and compelling content across the rapidly evolving wireless space,” said Mr. Adderton.

MVNO Funds

But it also costs big money to start an MVNO. Analysts estimate that Richard Branson spent $500 million to launch Virgin Mobile. SK Telecom and Earthlink’s Helio has raised $440 million.

Amp’d service cost roughly $300 million to launch, making it one of the best-funded companies of 2005.

With the MTV funds, the company has raised over $110 million, including venture money from Universal Music Group, Highland Capital Partners, Columbia Capital, and Redpoint Ventures (see Amp’d Raises $67M in Funding).