In the highly competitive world of mobile service, a relatively unknown startup is making a move to capture a sizable chunk of the market by offering a highly affordable plan. The company doing this is called FreedomPop, and they have an amazing phone offer to pair with their appealing free data plan. FreedomPop is offering name brand quality mobile phones like the Samsung Galaxy S4 for $100, and the Motorola E smartphone for just $40; both offers from FreedomPop are 80% below the regular market price. But their offer goes beyond just the phone; customers need a data plan too to cover actually using the phone in a meaningful way. And FreedomPop is able to provide high quality service there as well, for a price that no one can refuse. The company will set customers up with an introductory free month of unlimited voice calling, text messaging and 1 gigabyte of cellular data. Then customers will transition to their free plan of 500 megabytes of cellular data, 500 text messages and 500 calling minutes.
The way that FreedomPop can do this is because they are what’s known in the business as a Mobile Virtual Network Operator. FreedomPop buys wholesale network access from major carriers like Sprint, and resales that to attract retail customers. So they were not involved in building the network, but they were able to buy a piece of it at wholesale price and it is up to them to attract customers to use the network. That is the ultimate goal of the virtual network operator: to attract customers to the network. This could set up the company to then sell itself at a higher price down the road, when the network gets closer to full capacity.
FreedomPop launched in late 2012, and has guided estimates for 1 million customers by the end of 2015. And it looks to keep growing as it builds relationships with other operators. For instance, it has gained investment from a telecom operator that serves more than 230 million customers in Southeast Asian countries of Malaysia, Indonesia, India, Bangladesh, Singapore, Cambodia and Sri Lanka. FreedomPop’s plan gives it the real capability to offer a free mobile service and simple plans to millions of new mobile users. The FreedomPop CEO, Stephen Stokols, is focusing currently on tapping this exponential growth market with his company’s capability, and says in the future the company may look to pursue being acquired.