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.  

Shifting Spectrums in the US Cellular Industry

Although the radio waves are not physically realigning themselves, cellular companies have been to stead themselves for the future.

T-Mobile, which escaped from an AT andT acquisition by the FCC blocking the merger, grew by acquiring MetroPCS.  Although the “T-Metro” merger added 9 million subscribers to the  Deutsches Telekom holding company’s 34 million base, it remains the fourth  largest US cellular company.  But size isn’t everything.

T-Mobile did not acquire MetroPCS just to grow. T-Mobile wanted the MetroPCS spectrum.  Currently, MetroPCS is a CDMA carrier.  T-Mobile plans to phase out CDMA by 2015 and migrate customers to a HPSA+ system, which is not considered problematic as 60% of MetroPCS switch handsets each year.

 But T-Mobile USA will then utilize that spectrum for 4G LTE service.  This is crucial as currently T-Mobile boasts that their plans have “Full Speed LTE *”, however if you read the fine print, it is only for the first ½ Gigabite, then the data is throttled down to "Edge"-like 2G speeds. In a data hungry consumer environment, this is not real enticing to those who have graduated from feature phones. Perhaps Metro-PCS’s could help a bit in data coverage, as T-Mobile’s data coverage is scant outside of major metropolitan areas, and who has the patience for 1G connections?

What remains to be seen is if T-Mobile USA will support the agressive Metro-PCS plan to have Voice over LTE (VoLTE). Some industry speculation is that T-Mobile USA will wind down MetroPCS VoLTE naturally over a couple of years as customers shift to GSM/HPSA+ handsets.  Then T-Mobile USA would roll out their own VoLTE platform.  But will that be too late?

The 78%  acquisition of Sprint by Japanese Softbank for $21.6 billion  was delayed until this June 2013 to allow  Sprint completed its acquisition of the remaining 50% of Clearwire.  There was a clear synergy when Sprint’s 4G service was premised on Wimax like Clearwire.  But Sprint clearly wanted Clearwire’s spectrum.  Clearwire’s bankruptcy would have forced Clearwire to auction its large spectrum holdings and left it’s partner Sprint with worthless holdings.  In an auction environment, deep pocketed cellular rivals Verizon Wireless and ATT would have cost Sprint more to acquire the up for grabs spectrum rights.  So the $7 billion acquisition cost for internet wholesaler Clearwire made sense.  Now Sprint can allocate the 160 MHz of spectrum to bolster the third ranking US cellular provider’s  LTE data roll out.  The added spectrum may allow Sprint to be a cellular mecca for truly unlimited data consumers.

One might wonder why AT and T  was willing to pay $1.2 billion to acquire Leap Wireless subsidiary  Cricket Wireless?  AT and T  had just launched IO pre-paid phone subsidiary so it did not need another Mobile Virtual Network Operator (MVNO).  Cricket only added 5 million subscribers to second largest US carrier’s 96 million subscriber base.  So why did AT and T  pay nearly a 90% premium for Leap Wireless stock?  Clearly, the answer is spectrum.  Cricket has a 60% under-utilization of spectrum.  After the FCC blocked the ATT-T-Mobile merger in 2011, AT and T was hungry for spectrum.  Sprint’s completion of the Clearwire acquisition denied other opportunities for cheap spectrum.

While it is only anecdotal, there was a marked migration from AT and T after the carrier lost I-Phone exclusivity in 2011 was data coverage.  Recent speed tests showed that AT and T’s 4G LTE network was speedier than Verizon Wireless, but Verizon’s LTE footprint is much larger.  Gaining more bandwith may allow AT and T to broaden its LTE coverage with an added benefit of gaining another prepaid distribution network.

Cellular consumer activists, such as Harold Feld of Public Knowledge, condemned the proposed AT and T acquisition of Cricket Wireless, claiming that AT and T already has enough wireless capacity and thinks that low-income and poor credit customers would be adversely effected.  Perhaps it should not be surprising in the class envy age of Obama when community organizers dictate when companies "have enough" and should pay "their fair share."  But such animus is disconnected from reality.

Carriers seek more spectrum to keep up with customer demands.  The cellular industry has shifted from stingily selling voice minutes to essentially making them ubiquitous, but carriers make their money on data.  Verizon Wireless hopes to shift all of its voice calls to VoLTE by the end of 2014 as it is a more efficient conveyance of voice calls and then use the freed up spectrum to meet data needs.

In the MVNO market, Ting, FreedomPop and TextNow are set to offer extremely inexpensive cellular service which is made possible by employing VOIP (and VoLTE) technology.  Such services are built upon the backbone of excess capacity from major carriers (e.g.- Sprint).  Certainly, community activists should take cheer from the fact that these aspiring cellular carriers allow for Bring Your Own Device (BYOD) from older Sprint smartphones with clean ESNs, which is green and cost conscious.  Walmart's Straight Talk cellular service can give a second life to AT and T and T-Mobile GSM phones and old Verizon CDMA handsets. 

Sprint owns both Virgin Mobile USA and Boost Mobile, which have full smartphone services at half of the end cost of their parent company, albeit demanding pre-payment.  Then Sprint has Pay-Lo which offers very inexpensive Voice and Texting feature phones (dumb phones)  with limited cellular web access.  And of course, Assurance Wireless  et ali. provides the Obama-phones to provide cell service to those below the poverty line.  So do-good NGOs like Public Knowledge should not be worried that the poor are being underserved by the cellular industry. 

Even as the cellular industry figuratively shifts towards data spectrum, most consumers just care about getting a new handset and give little consideration to the details of a major household expense--their cellular bill.

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).

Choosing Cellular Competition–A Sweet Young Ting or a Virgin Mobile?

Cellular telephony allows us to always be in touch telephonically, to act as a digital music player, to have a camera and video cam at the ready, as well as potentially carrying around a computer in the deceptive disguise  of a smart-phone.  Some foolish souls will risk life and limb to keep their cell phones. But these ordinary conveniences come at a cost.  Today, a sizable major portion of Americans household budgets are dedicated to communication costs.  People become so caught up at the prospect of a shiny new telephonic toy that they lose sight of the monthly costs associated with this privilege.  

Recently, I wrote "A Cellular Call for Change” to consider how the mobile telephony industry in America is on the cusp of shifting away from highly subsidized handsets with expensive iron clad two year contracts to more of a BYOD marketplace which offers lower rates if you foot the bill for your phone.  The article urged the savvy consumer to know yourself and investigate thoroughly. 

Well, I took my own advice.  I dug deep into a spreadsheet about my household’s cell-phone usage while doing an intense analysis of cellular providers plans and quirks.  The results were somewhat surprising.

My household has been with Sprint for nearly six years.  We are well out of contract with our current smart-phones (a HTC Evo and a Samsung Epic) but we have been happy with the service, aside from the cost.  Since our handsets are in excellent condition, there is neither a need nor desire to upgrade phones, especially in return for a costly 24 month contract. 



Even though we were initially sold on Sprint because of the 7PM Nights and Weekends, a hard nosed analysis of usage showed the most of the minutes used stemmed from free Mobile-to-Mobile calling.  Yet including the Anytime, Nights and Weekends as well as Mobile-to-Mobile minutes, we never broke the 1000 minute total threshold (and one of the handsets consistently used most of the minutes).  Our texts were under 1000 total.  Data was the variable.  While it was nice to have the certainty of Unlimited Minutes, my household was not a data hog. There were a few times over the course of the year when we used 3 Gig of data a month between the phones, most months hovered just over 2 Gigs combined.  There were few months when mobile data usage was above 3 Gig and one month at 4 Gig.  

Most of our time is in the District of Calamity (sic) or Between the Beltways.  But much of our travel takes us to southwestern Virginia where cellular service can be persnickety, and 4G coverage is virtually non-existent. Our experience is that Sprint Network voice and data in the destination area is good for us without paying the high fees for Verizon’s stellar coverage.  

One would think that cellular companies would be keen on keeping their customers, especially those customers who are not servicing a subsidized phone anymore. Both Verizon and ATT have churn rates below 1%, while Sprint has a 1.69% churn and T-Moblile sports an ugly 2.10% rate. But such competitive spirit was not shown by our current carrier, as a couple of calls to Sprint’s Customer Service proved otherwise.

These Sprint Customer Service Reps were supposed to be staffing a retention line.  But other than being thanked for our long time loyalty and being reminded of a current rate, we were not given any incentives to stay.  Since we did not need a new low cost phone in exchange for a two year contract, they could do nothing for us. It is infuriating to pay a $10 a month surcharge per handset for smart- phones well after these extra costs were long since covered.  Worse yet, the CSRs gave conflicting and incorrect information while running down their Mobile Virtual Network Operator or MVNO competition (including Boost and Virgin Mobile which Sprint owns)..  The  CSR insisted that we could only save $30 a month by switching to a MVNO despite my research that we could save nearly thrice that amount. 

My research led me to two potential choices–a sweet young Ting (sic) or a Virgin Mobile.   Ting.com is a  MVNO owned by Tucows which operates off of the CDMA Sprint Network. While Ting has only been offering prepaid cellular service since February 2012, their parent company Tucows has been around since 1994 which gives it some credence of stability.  Ting’s distinctive feature is use what you pay for billing.   

Ting's pricing is given in tiers from XS to XXL for voice, texting and data and consumers can mix and match on a monthly basis.  If one estimates too high for any given service, Ting will credit the customer for the next month.  Ting does not charge for hotspots, which is a hot point for switching from Sprint which charges $29.99 per line for the privilege.  One other welcomed feature from Ting is a Customer Service line which operates during extended weekday business hours based in Canada, so a customer can understand what is being said to them, eh?  Ting does not subsidize handsets, but allows for BYOD (Bring Your Own Devices).

Ting seems to charge full freight on the new cell phones that they sell (even compared to other prepaid cellular services), but they have links for getting refurbished handsets as well as allowing one to BYOD.  While many all you can eat cellular consumers could have if they were charged based on usage, it seems that Ting has slightly higher rates for add-on data.  For instance, if a consumer exceeds 3Gig of Data, more data is charged at $22 a Gig.  If a consumer watches lots of mobile video or has cut the phone cord at the house, an unlimited plan may be a better way to go. 

For our household's purposes, the other cellular player is Virgin Mobile.  Virgin Mobile is a quasi-MVNO which is owned by Sprint and is their mid-ranged prepaid cellular service.  Virgin Mobile does not have the sexiest and newest smart-phones but their plans are quite attractively priced.   Virgin Mobile rates have three tiers.  

• For $55 a month, one can have unlimited voice, texting and data.  • The $45 a month plan has 1200 Voice  minutes, unlimited Texting and Data• A $35 a month plan has 300 Voice minutes, unlimited Texing and Data.

The caveat to unlimited data is 2.5 Gig at up to 4G speed, then a consumer is throttled back to 3G speed until the next billing period. If a consumer uses a Virgin Mobile hotspot, it is an additional $15 a month.  Although it is damn near impossible to speak to a human being through Virgin Mobile’s toll free number, the cyber telephone tree can yield information as well as the website.  Moreover, bills can be paid at plethora of locations, including 7-11 along with the web. 

While there has been conflicting information, Virgin Mobile does allow some Sprint CDMA devices to be ported to their MVNO.   Not all phones can be used thru Virgin Mobile as hotspots, so 4G Wimax phones are fine but the new to Sprint 4G LTE handsets can not be used in such a profligate way. 

Practically speaking, switching to Virgin Mobile does requiring replacing one handset and separate billing for each line.  At this time, Virgin Mobile is offering the Samsung Victory– a mid ranged Galaxy class handset with 4G LTE capabilities– at a reasonable rate.


Although I can conjure scenarios in which opting for Ting would save slightly more money than Virgin Mobile and offer free hotspots.  But for those out of pocket times when mobile data is key, a cost effective tactic would be to use a no to low cost external hotspot from FreedomPop.  It takes two for that plan to work and that may be too confusing to implement.  So the lowest priced option might not be the best way for my household.

Since most of the heavy mobile data usage would be in areas which only have 3G data coverage, it would not matter if the 4G was throttled back.  The hotspot could be turned on for the months when significant time is spent at the rural locale.

So as it stands, Virgin (Mobile) comes out on top in the head to head cellular competition against Ting.   Either way, it will cut our cell phone bill in half. The costs incurred to switch to Virgin Mobile to buy a new handset would be recouped in two months of savings viz-a-viz Sprint.  But I’ll still hold onto my old HTC Evo, as a backup and in case I switch again to a BYOD MVNO. 



Thomas Sowell once opined that “There are no such thing as solutions, but only trade offs.”  So to make the right choice, a savvy consumer should run the numbers themselves, determine if their carrier gives good reception where the phone will be used the most and determine how he will use cellular service.  If you are just texting, Ting charges $9 a month with 1000 texts or an SMS happy user $17 a month for 4000 texts. 

Virgin Mobile hypnotically suggests that one should "retrain your brain."  Some might find all of the choices confusing and headache inducing.  But think about all of the aspirin one can easily afford from your monthly cell phone savings!