FreedomPop goes OTT: gives away unlimited texting, 200 voice minutes per month
Sprint Nextel (NYSE:S) MVNO FreedomPop said starting later this summer it will offer unlimited texting and 200 VoIP-based voice calling minutes for free to select Android phone users. The offering represents the combination of FreedomPop's freemium business model with the over-the-top (OTT) messaging trend.
Importantly, FreedomPop said the data generated from the voice calls and texts won't count against the free 500 MB of data per month the company already provides users.
FreedomPop said its customers will also be able to place unlimited calls to each other under the new offering. The company will sell an unlimited calling option for $9.99 per month, and will offer a less expensive tier of voice calling minutes for an as-yet-to-be-determined price. FreedomPop's service is likely powered by textPlus--FreedomPop inked an agreement with textPlus for voice and messaging services in January--but FreedomPop declined to confirm whether textPlus is the vendor for its texting and voice service.
Further, FreedomPop also plans to start selling phones. The company told Forbes it would begin selling refurbished HTC EVO 4G Android phones within the next few months. Separately, the company told TechCrunch it would also sell the Samsung Galaxy S II and S III later this summer too. And FreedomPop will eventually allow its customers to bring any Sprint device to the FreedomPop service through Sprint's previously announced bring-your-own-device MVNO program.
The addition of texting and calling to FreedomPop's existing freemium wireless data service moves the company further into the mainstream wireless marketplace. Indeed, based on the company's new pricing scheme, a FreedomPop user could pay just $9.99 per month for unlimited voice calling and text messaging and 500 MB of high-speed data--a price far below what most operators charge.
"This is not only disruptive, but game-changing," New Street Research analyst Jonathan Chaplin said in FreedomPop's press release. "This move completely marginalizes the voice network by leveraging VoIP over cellular and is extremely threatening to already declining voice margins."
FreedomPop last year launched its freemium service through Clearwire's (NASDAQ:CLWR) WiMAX network, but is now moving over to Sprint's EV-DO and, later this year, LTE network. FreedomPop later this year plans to release an LTE-capable smartphone case that would connect to a user's device via Wi-Fi.
FreedomPop boasted that its business model, which relies on providing a free tier of service in the hopes that users will purchase additional service and other add-ons, has resulted gross margins of over 50 percent.
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Article updated June 5 with information about FreedomPop's phone plans.