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October 09, 2013

FreedomPop Takes a Shot at Carriers with Free Cell Phone Service Offer

Two years ago, a new startup company came on the scene. The goal was to become a wireless Internet provider that could offer a completely free mobile service. That company is FreedomPop. It was founded in 2011 and was backed by Skype co-founder Niklas Zennstrom.

In November 2012, FreedomPop began providing free and paid mobile wireless Internet services in the U.S. through wholesale Internet carrier Clearwire. In the past year, FreedomPop has expanded its service portfolio. It launched home broadband service that was significantly cheaper than home DSL or broadband. FreedomPop also extended its free wireless Internet service nationwide to cover most of the U.S. in April 2013. That is when it launched its first 3G/4G hotspot, the Overdrive Pro.

This week, FreedomPop has taken the next logical step. It is launching a full-feature mobile service that is free. What do you get for free? Well, in this package you have 200 anytime minutes, 500 text messages and 500 megabytes of free data. All this delivered on the HTC Evo Design handset.

The HTC Evo Design device has been refurbished and will be offered for $99. The device’s ROM has been modified so that it routes all voice calls over its 3G or 4G data connection. This however, is where a problem may present itself.

The HTC device runs on the Android 4.0 platform and has been modified to use the Sprint WiMAX service. So, it seems that while FreedomPop has moved to run on Sprint’s network, the HTC Evo Design will be running on the slower WiMAX 4G network. By only buying refurbished HTC Evo Design handsets, FreedomPop expects to keep its costs down.

With respect to using the WiMAX network, Tony Miller, who is vice president, FreedomPop, said “We’re not touching the voice network at all. If we were to go with Sprint’s voice network the cost of the deal would be orders of magnitude higher and the free plan would between $15 and $20.”

The way that FreedomPop can make such an offer is that it buys data in bulk from Sprint, it then uses this to offer voice over IP (VoIP). Now, you do have to remember that this is freemium deal. That means that if you need more than what is offered in the free package, you have a few options.

You can pay a little extra for an upgraded monthly plan. For $8 a month you can go up to 500 minutes, 500 megabytes and unlimited text. If you want to go hog-wild, $10.99 a month gets you the 500 megabytes of data along with unlimited voice and text. These options are also without a contract.

For now you can only use the refurbished HTC Evo Design, however it is expected that there will be more options in the near future. Something to consider is that FreedomPop seems to only be buying refurbished devices. This is a way to keep its costs down, but this information is not listed on its website.

Edited by Rachel Ramsey

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