FreedomPop is hitting US carriers where it hurts with its new free mobile phone service

FreedomPop is hitting US carriers where it hurts with its new free mobile phone service

FreedomPop has launched its innovative free mobile phone service, offering customers 500MB of data, 500 text messages and 200 voice minutes per month at no charge.

The company, which acts as a mobile virtual network operator by purchasing bandwidth from Sprint, made waves when it first announced the service back in June. Pre-order demand for the Freedom Phone was so high that FreedomPop raised an extra $5 million in funding to prepare for shipments.

At launch, Freedom Phone plans require the purchase of a refurbished $99 HTC Evo Design handset from FreedomPop. Customers can get unlimited texts for $7.99 a month and unlimited voice and texts for $10.99. Additional data can be purchased as needed.

FreedomPop’s business model involves keeping costs low by converting voice calls to data. It also generates revenue through upselling extra features and providing offers that let customers earn extra data on some plans.

The biggest drawback to FreedomPop’s new service is that it’s currently limited to the dated Evo Design smartphone. CEO and co-founder Stephen Stokols said the company has plans to roll out more Android handsets later this year.

“Whatever device is popular, we’re going to try and secure. We don’t want to be tied to one device,” he said.

Companies like FreedomPop and Republic Wireless are taking direct aim at the high margins of the larger carriers in the US. Smartphone selection continues to be an issue for both operators, but plenty of consumers will be willing to give up having the latest phones in exchange for the huge savings they offer.

Even with just the Evo Design, FreedomPop hasn’t had any trouble drumming up demand. Stokols noted that interested customers have been showing up at the company’s office asking when the service will arrive.

“We had strong demand on [our mobile hotspot product], but this is orders of magnitude different,” he said.

Demand for the Freedom Phone has already outstripped the company’s supply of handsets. FreedomPop plans to on-board customers gradually in order to work out any operational or customer service issues.

The Freedom Phone was originally scheduled to launch by the end of summer, but FreedomPop decided to push it back a week to coincide with its one-year anniversary. The startup got its start offering a Wi-Fi mobile hotspots. Over the past year, FreedomPop has given away over 500 million MB of free data.

If it can execute its plan properly, FreedomPop stands an excellent chance at shaking up the wireless market in the US with its free offering. Considering how much we’ve been paying the Big Four for service, it’s about damn time.

Image credit: Shutterstock / kao

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