Reports that Sonopia was shutting down spread like wildfire yesterday, but its founder Juha Christensen, said today it’s not true. The company is still alive, but drastically scaling back its business and essentially hibernating until the U.S. MVNO market turns around. Sonopia has eliminated all of its U.S. employees from its Menlo Park, Calif. headquarters. Even Christensen holds the unpaid position of Chairman. In their development offices in Ukraine, they have 30 people or half as many as before. As they wait, Christensen is looking at expanding into Europe, where MVNOs have performed better but no decisions have been made. “U.S. consumers have not warmed up to MVNOs, there really hasn’t been an MVNO that has shown the way and made a spectacular success out of it, and in Europe, you’ve seen MVNOs play a role in each of the main markets—sooner or later that will happen in the US,” he said.

At its core, Sonopia was an MVNO of MVNOs, meaning it allowed anyone to easily set up a cellphone business for a particular niche, brand or non-profit. That model would imply that tons would have to be successful in order for Sonopia to do well. Since launching a year ago, they have signed up thousands of services, everything from The National Wildlife Foundation and Audubon Mobile to more obscure things like Apple (NSDQ: AAPL) Fans, Yoga and Boxing. Christensen said while the company reorganizes, the customers will still be able to use their phones, but Sonopia is now using a third-party to obtain wholesale minutes, rather than having a direct-carrier relationship. Sonopia has raised about $20 million in venture capital, and Christensen said he’s not looking for anymore.

His take on the U.S. MVNO scene: He sees some success among the lower tier of the market, among players like Tracfone and Virgin Mobile (NYSE: VM), but it remains to be seen if it can move up the value chain. His opinion on Helio is that the business is likely not performing well—they haven’t come out with new handsets in awhile, and they are tweaking the pricing plans, but that hasn’t increased subscribers drastically. “I like the concept of Helio, but if it was going to be a success, we would have seen it several quarters ago,” he said. “I don’t think the business is in very good shape, the question is how long will the owners continue to feed it with cash.”

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