FreedomPop Will Take On Carriers By Offering Smartphones And Freemium Phone Plan
techcrunch.com
techcrunch.com
There's a $2 fee if you come close to your bandwidth cap (where they automatically 'helpfully' add value so you don't run out) and a $.99 fee if you don't use enough data (at least 5 MB a month). They'll probably have new and exciting secret fees when they roll this out.
I very much dislike the redefinition of the words 'free' and 'unlimited' among telecom providers, and we as a community should not support this. They're asking me for a credit card number to signup, ipso facto, it isn't free.
Yes, there are 101 up-sells and add-ons that cost money. However, as long as you use that 5MB minimum none of them are surprises. The '$2 fee' you speak of is (as you implied) not so much a fee as 'recharging your prepaid card.' They we're upfront about it and they make it easy to disable.
Everything else is a GoDaddy style up-sell. Annoying, but very easy to ignore.
Other than the initial purchase I haven't paid them a cent.
Even though Freedompop has had to go to market without the crazy low lightsquared pricing, they found an ally in Clearwire who has nothing but excess capacity. Ergo, freedompop gets a data rate they can resell at high margin.
I want them to win but VoIP over 3G is hard. Very curious about what infrastructure they're using to do the VoIP calls and whether there's going to be a proper switch in the core.
I have a FreedomPop Rocket Sleeve that I use with an iTouch, had it for about a year now. I've never paid for more than the free 500MB bandwidth since I only use it in the rare times I'm out of a Wifi zone. And I'm pretty conservative with my data usage.
But FreedomPop is claiming 50% margin on their bandwidth, so I guess there are a lot of people buying more data. They must feel confident that this will carry on with the phones.
Wholesale bandwidth is significantly cheaper on Clearwire than regular cell networks. (Clearwire gets an average revenue of $11 per user per month. Rumor is that their wholesale agreement with Sprint is roughly $1 per GB, or $10 per subscriber per month.)
If those numbers are true, then giving users 500mb free bandwidth might only cost FreedomPop as low as 50 cents per month per user.
Ironically, I also have Clearwire data service at home and I'm paying $24/mo for the exact same data (except it's uncapped and I'm using about 30GB/month).
Looks like a freemium model.
* Edit - Some more ways they make money:
- setting to automatically top your account off if you get below 100 MB left is on by default
- $0.99 maintenance fee if you use less than 5 MB in a month (wow)
For $3.99/mo you get 500MB on the Sprint 3G/4G network and an additional $3.49/mo lets you roll over up to 500MB of unused data each month the thing is just sitting there unused. Yes 4G coverage is minimal nationwide, and I'd choose Verizon over Sprint given the choice, but for probably under $100/year my kids now have all the internet access they need for car trips. Additional GB are $20 if you use up what you've accumulated.