UK firm Ovivo Mobile announced without warning last night that it was shutting down due to "reasons beyond our control".

Early rumours suggest the reason behind the sudden closure is a significant shortage of cash, with some reports suggesting that the company had less than £10,000 to its name. Ovivo Mobile was set up two years ago and had amassed around 50,000 subscribers.

In a statement on its website, the UK-based mobile virtual network operator (MVNO) said:

"We are very sad to announce that for reasons beyond our control, Ovivo Mobile is closing down. We'd like to thank each and every one of you for your support and friendship over the last two years."

Ovivo was unique in the UK in that it offered customers a free mobile tariff, funded solely by advertising.

The company launched in 2012 through the crowdfunding website CrowdCube, raising £414,000 in its initial round of funding. Once launched it offered customers free access to Vodafone's network in exchange for showing adverts on the user's web browser every 10 minutes.

Founder and CEO Dariush Zand, previously employed by Sony Ericsson and Vodafone, revealed in an interview two years ago that the concept behind the company was one many thought was not possible.

"(It) is all about achieving up until now what is thought to be impossible," he told mobile phone podcast The Fonecast.

SIM cards for Ovivo Mobile - costing £20 to cover initial setup and admin fees - were still available to buy yesterday evening, right up until the point of the announcement.

Users have reported on web forums that so far customers have been unable to reclaim any money from recent purchases.

Others have complained that phone and data signal for the MVNO was cut off completely and without warning, leaving its significant subscriber base no chance to seek out an alternative provider.

Ovivo customers who have been dropped by the service have been advised to fill out a form on the company's website in order to keep their old phone number.