FreedomPop has extended its freemium model, says hello to mobile data

6.7.2013 Daniel Jaramillo

FreedomPop, the new mobile ISP, plans to take its freeware- or “freemium” business model which has insofar been an extremely popular for Web services, and apply it to mobile broadband access, , giving away access toClearwire’s WiMAX and future LTE networks to most customers at no charge.If FreedomPop can manage to get the calculations correct, it has huge potential to shake up the U.S. wireless market by extending mobile data services to the masses.

They have kept this all on the down-low since it announced its plans for this new strategy in December. Back then, it announced it would purchase wholesale capacity from the dwindling company LightSquared, raising questions regarding whether or not the new service would get off the ground. Recently,  the Federal Communications Commission stated that it planned to take away LightSquared’s LTE network waiver, in effect killing its plans to launch a wholesale nationwide mobile broadband network. Just a day later, FreedomPop had a new wholesale partner and said it would reveal more of its launch plans in a press conference this afternoon.

FreedomPop VP of Marketing Tony Miller said this in a statement:  “FreedomPop’s ultimate goal of providing our customers with a free mobile broadband alternative will soon be realized thanks to Clearwire’s proven 4G network services, this agreement enables FreedomPop to offer a disruptive retail service, providing free, flexible, high-speed internet access to millions of Americans.” Add to this the details that were written up in Forbes’ interview with Miller last week and you get a detailed view of the company’s unique business model.

To summarize, FreedomPop plans to offer a “free” basic service to most of its customers but they will charge fees to premium users, which Miller expected would account for 10 percent to 15 percent of the ISP’s subscriber base. FreedomPop won’t sell products and devices, but rather loan them to customers for free as long as they put down a deposit, making it a more secure sales environment on the customers end, and instead of smartphones and slates, FreedomPop will distribute only modems, such as USB sticks and mobile hotspots, which customers can use to connect their any device they please; smartphones, tablets, laptops and the like.

Miller didn’t reveal anything to Forbes when he spoke to them about any specific details about how FreedomPop will set the prices on its premium plans or just exactly how they will turn all of these operations into a financial success. It is still a mystery as to how it will monetize all of the free broadband access it has planned to hand out, although he did add a bit of information regarding the virtual ISP and that it plans to make use of the mobile advertising to add to its revenue.

If all of these operations that are to span from FreedomPop’s plans sound like many an internet service out on the market, it is definitely not by accident. One of the company’s biggest backers is Niklas Zennstrom, co-founder of both Skype and Kazaa. Many companies have put freemium, or freeware, at the core of their business models and services, offering their platforms and basic functions for free and grabbing the attention and love of users and then pitching a service even better in its premium versions.

how exactly is FreedomPop to transfer their freemium model to a wireless ISP? That’s puzzling, but it could implement data caps on its free subscribers and charge for excess data usage or it could slow down speeds to limit usage of high-bandwidth applications like video – or it might implement both and rake in the big bucks.

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