FreedomPop is
an internet service provider started by Skype co- founder Niklas Zennstrom with
a motto "The Internet is a right and not a privilege". FreedomPop seeks to expand its reach in
providing "Free access for all" with its first foray in cheap
cellular phone service.
FreedomPop is
operating as a Mobile Virtual Network Operator (MVNO) based off of Sprint's
network, primarily using the CDMA and WiMax capabilities and eventually using
LTE. FreedomPop is structuring its
consumer cellular offering on a freemium model.
A basic consumer receives 200 voice minutes, 500 texts and 500 MB of 4G
data along with free calls to other FreedomPop customers for the amazing low
price of free! And there is no contract
to boot.
FreedomPop's
CEO Stephen
Stokols proudly proclaimed that a customer paying $1,500 for cellular
service could cut their bill by 2/3rds with FreedomPop. Stokols said: "That is real value, real
savings and a real meteor to the current market dynamics."
How can
FreedomPop give consumers gratis basic cellular service? The Freemium model is designed to entice
subscribers to pay a little for more.
Based on its experience offering Freemium service for hotspots,
FreedomPop expects 45%
of its customers to pay a little more for their low cost monthly
plans. A customer paying $7.99 a month
gets 500 anytime voice minutes, unlimited texting and the 500 MB of data. A customer "splurging" by paying
$10.99 a month gets unlimited voice, unlimited texting and 500 MB of data.
Another
aspect of the Freemium model is engaging customers in social media. The FreedomPop hotspots gave consumers
opportunities to get more service by speading the word to their friends and
participating in sponsors offers. This
is useful for customers who do not mind peer-to-peer marketing or spending
their time to save money.
Much like the
shifting spectrums in the cellular communication
industry, where FreedomPop will rack up fees is on data. The basic 500 MB is sufficient only for
checking e-mails or viewing static, text based websites. A FreedomPop phone
consumer who opts for the Premium data plan gets 1 GB for $10 a month (first
month free). After a consumer uses their
alloted monthly data, it is $0.01 a MB, or around $10 a GB.
As an MVNO,
FreedomPop is maximizing Sprint's over-capacity. Sprint has migrated from the slower 4G
WiMax service to 4G LTE data, which
allows MVNOs to utilize the inchoate WiMax mobile data until Sprint stops
servicing WiMax data. Sprint had planned to keep WiMax going through
2015, but Sprint's
total acquisition of ClearWire (which provided the WiMax backbone) might
change those plans.
Another means
which FreedomPop offers value for consumers while providing a profit center is
with the handsets. FreedomPop is
selling refurbished Sprint smartphones.
During their beta phase of phone roll-out, FreedomPop is selling
refurbished HTC Evo Design phones for $99.99 (but will eventually cost
$149.99) but without contract.
From a price
standpoint, $100 for a no contract smartphone sounds like a good deal. But the HTC Evo Design is
a smartphone with 4.0" inch screen, a single core processer running
Android 4.0 OS (Ice Cream Sandwich) with 3G/4G WiMax. When the HTC Evo Design premiered in October
2011, it was a considered mid range smartphone. FreedomPop will be selling a two year old
refurbished cell phone for $100/$150 when it sells for much less on Ebay.
As a cellular
phone consumer, I am not someone who
needs to have the latest and greatest handsets.
I have bought and been happy using some refurbished cellphones. However, I am chary about paying more than
street value for a two year old cell phone without new technology
guarantees. The HTC Evo Design has 4G
WiMax which is fine (where available), but a cost conscious consumer should be
mindful that his handset may only have a usable shelf life of just over a year,
presuming that Sprint does not turn off WiMax prematurely.
FreedomPop
hopes to have more
handsets for sale later in 2013, some with 4G LTE data capability. FreedomPop always intends to have a $100
handset available. FreedomPop may allow
for Bring Your Own Devices (BYOD) from Sprint.
There is some speculation that FreedomPop could follow the
incremental purchase plans for expensive smartphones, like T-Mobile, AT and
T, Verizon Wireless and now Sprint have done, charging perhaps $30 a month to
effectively rent a handset.
Another way
that FreedomPop's Phone service can offer their inexpensive cellular service is
to have Voice Over Internet Protocol (VOIP) voice calls. Some may fear that VOIP sound quality may be
inferior. However, Verizon Wireless is
gearing to start switching their voice
service to Voice
Over LTE (VO-LTE) in late 2014.
FreedomPop Phone minimizes data strain to their MVNO system by prompting
handsets to use WiFi whenever available.
For cell
phone users who are heeding the cellular call for
change, if someone plans to switch to FreedomPop Phone, be aware that WiMax
phones may have to be replaced in a year. If a cellular phone customer uses
mobile internet for more than occasional
quick peeks on the world wide web, it would behoove them to get more
data from FreedomPop, either through the Freemium offers or purchasing an
additional data plan.
Personally, I
would be quite interested with FreedomPop cellular phone service if they allow
BYOD, as I have a perfectly good Sprint HTC Evo to use. If I can be assured that I have hotspot
capability, I would certainly pay for premium data services.
For cost conscious cellular consumers who use
little to no data, FreedomPop cellular service would be an excellent choice
rather than Pay-Lo
or Assurance
Wireless. FreedomPop's Premium plan
would be around 1/3 of the cost of Ting's Medium Plan (500 voice minutes , 1000
texts and 500 MB data), but Ting offers
excellent weekday phone support and allows for hotspots.
Sometimes free is not always the right choice. Determine whether one is willing to buy a refurbished smartphone for virtually no monthly cost of commitment. Then discern what sort of mobile data usage one will be comfortable with on your cell phone.
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