FreedomPop's First Foray in Cheap Cellular Service

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.  

Patching Over the Disconnect on Cell Phone Savings

After becoming fed up for a high cell phone bill, I researched strategies when issuing a Cellular Call for Change in saving on mobile telephony bills.  Granted that people have different needs and one plan does not fit all.  But while the notion of economizing on cellular charges has an abstract appeal, many are called but few choose to mitigate mobile communication costs. 

It was clear that one impediment from consumers heeding a call for cellular change was the US cycle of receiving subsidized handsets in exchange for an iron clad two year contract.  Someone was interested in upgrading their iPhone 4S to an iPhone 5.  The cellular customer would likely stay with Verizon because of their excellent coverage but she is pressed to upgrade as there is only a limited period that the “new every two” is applicable. 

Sometimes, the desire for a shiny new techno-toy overrides everything.  A nephew got tired of using his feature phone to text so he wanted to splurge on a Google Nexus 4 from T-Mobile.  But in order to satisfy this techno sweet tooth for Android Jelly Bean meant walking away from a grandfathered $25 per month pre-paid plan through Mobile Virtual Network Operator (MVNO) Virgin Mobile.  After the sugar rush from Jelly Bean, he may be surprised that not only did his monthly bill double, but he also is responsible for taxes and fees which often add an additional 20%.

Another friend who would be  inclined to economize on cellular costs feels that switching cellular providers is impossible because of the family plan.  Nights and Weekend and mobile-to-mobile minutes cut down on metered usage.  And big buckets of shared data has a mystique.  Sprint prides itself on truly unlimited data.   But how many cell phone users consistently stream Titanic on a 4" screen?  It might well be cheaper to get separate plans with an MVNO but it pays to check your usage yourself first before switching.

There is a strange bias in the cellular industry about prepaid plans, which is epitomized in a mock Apple i-phone ad.  Sprint’s Customer Retention Represenatives employed a  strange selling point when trying to break up with them as they denigrated Sprint’s own MVNOs of Virgin Mobile and Boost Mobile as being “just a prepaid plan” was supposed to be a selling point, when those MVNOs could cut my bill in half.   In response to this built up consumer bias, some prepaid cellular providers like Cricket Mobile have migrated away from branding their handsets so that others do not look scornfully at their consumers.

As I was migrating to Virgin Mobile , my beloved wife hesitated because of her love of a sliding keyboard smart-phone.  Some MVNOs like Boost Mobile and Ting (both running off of the Sprint network) allow for Bring Your Own Device (BYOD) but  that “white list” can be short list as new phones are excluded. Alas, sliding keyboard smartphones have gone out of vogue so she will either have to adjust or lovingly cradle her handset for the foreseeable future.

Aside from overcoming the unwarranted bias against prepaid plans, stifling the urge to get new subsidized phones in exchange for a two year contract and feeling that a consumer NEEDS to have unlimited minutes, the wise cell phone shopper should discern what they need based upon experience and inclinations.  If you have to have coverage everyone, then pay a premium for Verizon’s excellent cellular coverage.  If you find that you unlimited data is sine qua non, then look to Sprint,

Other carriers claim that they have unlimited data but they have different understandings of the concept than a plain reading of the words. For instance, T-Mobile’s base smartphone plan touts “Unlimited Data at 4G speed”.  But in smaller print, this unlimited 4G data is only for the first half gig, after that you are governed down to 1G speed (more or less 128kbs.   For comparison purposes, think back to dial up internet, where you could surf via telephone at 54 kbs.  Today, it might work at a plodding pace for e-mails, but forget about downloading graphics much less video. 

There are some new and lesser known cell providers which might be the right choice.  Ting is a cellular phone service by Tucows using the Sprint network has a pay for what you use approach and they allow customers to have multiple devices on the same account and to use use old Sprint devices.  Another attractive feature is bundling in features like HotSpots gratis, while other carriers charge a premium (e.g. Sprint charges $19.99 for 2 GB Hotspot).  








FreedomPop is another prospective MVNO celluar provider which operates on a “Fremium” model.  When FreedomPop launches its phone service in August or September, they will offer 200 voice minutes, unlimited texting and 500 MB of data for FREE.  Moreover, FreedomPop will allow customers to use old Sprint phones.





 How can FreedomPop expect to charge nothing and give away their base plan?  They have found with their mobile hotspots and wireless home internet that about 40% of their customers pay for some upgrades.   FreedomPop’s calls will be made using 3G VOIP, which should have good sound quality.  FreedomPop’s Freemium model also relys upon social networking for advertising, so customers can earn more data or minutes by taking surveys or recommending friends.  FreedomPop also economizes by not having humans staffing their customer service outreach.  


Several parents in “my circle” have considered getting their tween children cell phones to keep in touch after school etc..  For techie involved parents, Kajeet might be a good provider.  Kajeet is a Sprint based no contract MVNO created especially with kids in mind with plenty of parental controls.  While Kajeet offers pay-as-you-go plans which start at $4.99, a worried parent might want to get the $24.99 plan, which includes 300 anytime minutes a month, unlimited texting along with a GPS locator.  The GPS Phone locator allows parents to find their kids at any time, as well as allowing parents to schedule e-mail updates on their childrens’ whereabouts.  Kajeet allows for BYOD but only for Sprint phones.   The fine print indicates that Kajeet adds a 10% transaction cost to all service plans supposedly to defray administrative costs. 

Another approach for kid communication might be thru a PayLo plan from Virgin Mobile, which can be as low as $20 a month for 400 minutes, but texts are 15 cents each and very expensive web access at $1.50 per MB.   The PayLo $30 plan has unlimited calling and unlimited messages but the very expensive $1.50 per MB for internet.  Frankly, it would make more sense to go with a low end Virgin Mobile plan which offers 300 voice minutes, but unlimited texts and unlimited internet (but after 2.5 GB, the user is throttled back to 3G speed).   Virgin Mobile USA does not allow customers to port their phones.  Most of Virgin Mobile’s  non-subsidized phones are popularly priced (as they are older handsets) but they are currently offering their non-contract  i-Phone 4S and i-Phone 4 (selling for $382 and $279 respectively).