FreedomPop, a startup that has cut its teeth selling “free” mobile voice and data services to cost-conscious consumers, is expanding into the WiFi-only world with a plan that sells for $5 per month.
Billed as an LTE alternative that allows customers to auto-connect to hotspots that are part of FreedomPop’s WiFi network, the new plan, which offers unlimited voice, text and data, is getting off the ground with a network that spans 10 million hotspots, including an undisclosed number that have been deployed by cable operators.
Of that total, roughly 8 million are “premium” hotspots, meaning they are closed and require credentials before connectivity is allowed, Stephen Stokols, FreedomPop’s CEO, said, noting that FreedomPop’s new WiFi-facing app will authenticate subscribers to those participating networks.
FreedomPop’s new app and its auto-connection capabilities will initially be available via Google Play for Android devices, but hopes to work with Apple to make iOS devices work seamlessly on its aggregated WiFi network.
And FreedomPop is in the process of expanding its aggregated WiFi network. Stokols said he expects 30 million to 50 million hotspots on the FreedomPop network to be auto-connectable within about six months.
“We’re trying to aggregate the aggregators,” he said. “We’re trying to transfer the value of these networks to the consumer directly.”
FreedomPop isn’t identifying whose WiFi networks are being aggregated, but Stokols acknowledged that the company’s current network does include hotspots that have been deployed by MSOs.
In the U.S., cable operator members of the “Cable WiFi” roaming alliance – Comcast, Time Warner Cable, Cox Communications, Cablevision Systems and Bright House Networks – have deployed more than 300,000 hotspots in businesses and other indoor and outdoor public venues. Charter Communications has said it intends to join that group. Comcast and Cablevision, meanwhile, have begun to introduce secondary SSID signals in millions of home-side gateways that are accessible by their respective broadband subscribers.
Early on, those operators have been using their WiFi networks primarily as a free perk for residential cable modem subscribers, but FreedomPop’s approach could provide them with a new way to monetize them.
FreedomPop, Stokols said, see a large potential market for its new WiFi-only product. Potential customers in the low-hanging fruit category include consumers who want to wring value out of older Android phones that are no longer attached to a cellular service. This “plus-one” scenario, for example, could provide parents with an inexpensive way to provide a connected device to their children. Stokols estimates that there are about 200 million abandoned phones that fit the category.
He also sees the model appealing to consumers on a tight budget or those who can’t afford cellular services. Stokols said WiFi product could also give FreedomPop a way to eat into the prepaid smartphone market.
Because FreedomPop’s WiFi product is unlimited, the company expects to eat some margin on a small set of users who gobble up lots of data, but believes the anticipated consumption patterns of most customers will make the business model work.
“As wireless carriers like Verizon and AT&T commit billions to build LTE networks, companies like Google and Comcast are investing in Wi-Fi-based networks to deliver mobile data access to consumers at a lower cost,” Steven Sesar, FreedomPop’s COO, said in a statement. “Now FreedomPop is the first mobile carrier to offer access to the largest nationwide Wi-Fi network with talk, text and data, giving cash strapped consumers an alternative to high priced LTE data plans, or a way to simply cut down on their cellular data usage.”
Last fall, FreedomPop launched its own brand of Android-powered products that carry sub-$100 price point, complementing the company's distribution of refurbished Sprint devices. Those products come with FreedomPop’s free text and voice service – up to 200 voice minutes and 500 texts per month before tiered pricing plans apply.
