Wednesday, October 9, 2013

A Bit About FreedomPop's Cheap Cellular Phone 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. 


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. 


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.


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.


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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