Freemium phone service for the US
Oct 2, 2013
Freedompop has been around for exactly a year offering free data with a mobile hotspot device (see - Point of presents) and threatening to offer more via its MVNO arrangement with Sprint.
On its birthday it's just announced a new freemium smartphone service - 500 texts, 200 minutes and 500 meg - all for free, with low-cost overages and a premium $11 per month unlimited calls and texts plan for those who can't be bothered staying under the limit. Some money is therefore presumably made on the smartphone sale which has the added advantage of generating cash up-front. More money is gleaned from overages or upgrade plans.
As such it's actually in danger of looking like a reverse subsidy - the phone subsidising the service rather than the other way about.
The problem with Sprint's WiMAX network is that it is WiMAX - not many devices and quickly going off the radar screen. That's also its advantage from Freedompop's point of view since it must mean it's wrung a favourable MVNO deal from Sprint.
One downside from that: Freedompop's new smartphone service is only available on a $99 refurbished HTC Evo Design - the first WiMax 4G phone now reaching the end of its useful life. Freedompop says it plans to open that out so that users can use any Sprint phone, but for this first phase it appears to have costed-out everything against bulk-buying that particular unit.
So what sort of user will go this route? You have to suspect that many of these will be bought 'for' users rather than 'by' them. For children as trainer-wheels for a full service some time distant, or for elderly relatives who claim they only require occasional use, but who may 'up' their usage over time to give Freedompop some revenue. In that case, many won't be over-users or upgraders. It will be interesting to see what Freedompop offers on its second birthday.
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