With computer-quality smartphones and broadband Internet emerging as technological norms in modern society, members of the lower classes inevitably struggle to stay as up-to-date as possible. Furthermore, with rising costs of higher education and more Americans in debt than ever, affordable options for smartphones represent an imperative for a wide swath of the population. Enter: FreedomPop.
FreedomPop’s model is based on offering “100% free mobile phone and high-speed internet service,” to directly quote their website. The big question with respect to this is, how do you monetize a company predicated on offering a free service? Well, claiming their service is “100% free” is a bit of a misrepresentation (after all, nothing is 100% free). In order to use their high-speed Internet, consumers must purchase a FreedomPop device (like the Photon) to establish wireless networks. Additionally, FreedomPop offers users the option to buy used and refurbished Sprint smartphones to connect with FreedomPop’s mobile network. Sure, the service is pretty limited: users get 200 minutes of calls, 500 texts, and 500 MB of data/month, with voicemail and increased allowances available if the user is willing to pay. However, by refurbishing slightly older smartphone models and packaging them to consumers with free service, FreedomPop is making the technology available for even the most modest budgets.
The startup recently announced the launch of its latest service: nationwide access to millions of Wi-Fi hotspots throughout the country for $5 a month. For the first quarter of the launch, this entails the implementation of 10 million hotspots in various establishments including McDonalds, Starbucks, and Best Buy. The number is set to expand to 25 million after the first quarter, and, although the app is currently only available for Android users, an Apple adaptation is in development.
With so many mobile-carrier brands firmly established in the consumer-conscious, FreedomPop’s biggest challenge will be in improving adoption. However, with the number of users breaking 1 million in the US and plans to expand into European markets underway, the startup appears to be in pretty good shape (and a $19 million raise from investors last year certainly doesn’t hurt).
As with any startup, raising awareness presents a fundamental obstacle to overcome. Establishing ties with other, more popular brands provides credibility and legitimacy to new names in the market. And FreedomPop has certainly aligned itself with the right connections, at least as far as its investors go. Atomico Ventures and Mangrove, two of the FreedomPop’s most substantial investors, are both Skype affiliated, which, for a telecommunication startup, represents an ideal association for potential customers.
If FreedomPop carries on this trajectory, it could become highly disruptive in the mobile market. Its identity as a “100% free” mobile/internet provider has important implications for society far beyond the mobile market. Greater access to technology has enormous potential for empowering the economically disadvantaged, and with inequality on the rise in America, this business model could change the lives of many Americans. Proper leveraging of awareness campaigns and brand identity management could very well position FreedomPop at the forefront of a mobile revolution.