FreedomPop Takes Aim At Carriers With Its New, Free Phone Plan

Next Story

Calling Hardware Startups, Compete In Hardware Battlefield For $50,000

Is your cell phone bill too expensive? So is mine. Wireless data startup FreedomPop has been trying to tackle that little financial truth for the better part of two years now, and it’s finally ready to take aim at traditional wireless carriers and their pricey monthly plans.

In exchange for a whopping zero dollars a month, you can have 500MB of data, 500 text messages, and 200 voice minutes. If you’re the sort who doesn’t need to be glued to a smartphone every waking moment, you may want to pay attention.

And the first smartphone to fly under the FreedomPop banner? The $99 refurbished HTC EVO Design 4G, a device that first debuted on Sprint’s store shelves in late 2011. It’s not just any EVO Design either — the device’s ROM has been modified so that it routes all voice calls over its 3G or 4G data connection in a bid to save the company some serious money. After all, the prospect of making money with a freemium service is a dicey one, even if you’re a mildly buzzy startup that’s raised north of $16 million since last year.

“We’re not touching the voice network at all,” FreedomPop VP Tony Miller explained. “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.” All of that backroom wheeling and dealing remains transparent to the end user though, as they can use the stock Android dialer and messaging apps just as they always could.

But for free? We’ve seen MVNOs like Ting and upstarts like Andreessen Horowitz-backed Zact tackle the plan pricing problem by allowing for fine-grained tweaking, but where does FreedomPop’s money come from? A slew of value-add features and bigger data, voice, and messaging buckets. If that free plan just isn’t enough for you, you have to option to shell out $10.99 to jump up to unlimited voice and texting. Too steep? A $7.99/month plan nets you 500 minutes, unlimited messages, and 500MB of data. So far, adoption of those plans seems to be moving in the right direction — Miller noted that 45 percent of the “six figure” FreedomPop subscriber base regularly pay for an additional feature or service plan, and the company is hoping to see that figure inch closer to 55 percent for its phone service.

The spec sheet of FreedomPop’s inaugural phone is dated to say the least, but the real bummer here is that you’re stuck with a WiMAX-only device — a quick look at the Sprint/CLEAR’s WiMAX footprint probably won’t leave you feeling too thrilled. In case you haven’t been keeping tabs on the nuances of the wireless data market these past few years (and man have you missed out), Sprint worked with Clearwire to develop a 4th generation wireless data infrastructure to rival LTE back in 2010. It eventually became clear that WiMAX was basically a dog, and Sprint shifted gears to build out an LTE network like the rest of its competitors. FreedomPop is all too aware that WiMAX presents a curious set of problems since they’ve talked up their own adoption of Sprint’s LTE network.

“When we launched LTE a few months ago it was with the phone in mind,” Miller added. “It puts us in a great position, and we’ll very quickly be able to throw high-end LTE devices onto the network.” It’s way too early to tell if the team will ever reach the critical mass it needs, but I suspect they may have finally found their footing with this idea.