Point of presents
Aug 7, 2013
FreedomPop has a weird beast of a business model. The company is an MVNO with Sprint. It offers users a portable hotspot providing broad(ish)band access via Clearwire's WiMAX and now LTE for $199 ($149 introductory offer) for the box.
It then offers 'free' access up to 500 Mbytes per month, making its money through overages or selling extra capacity. Over half of its current customers manage to buy the box and stay under the 500 Mbytes per month barrier and so pay nothing more.
FreedomPop also offers other incentives: there's a scheme to enable users to share bandwidth and earn yet more bandwidth by participating in marketing offers. So there's a social network element to the whole thing as well.
It may be complex but it appears to work: FreedomPop has already attracted 100,000 customers and the speedier LTE option is expected to make it work even better and attract more. Of those, over 40 per cent have migrated in one form or another from the 'free' to the 'mium' by being on a monthly plan or, presumably, habitually paying for overages.
The only reason this sort of thing gets off the ground at all is that in the US LTE can actually compete with fixed broadband - not because its LTE is fast, but because DSL is not only slow but expensive.