Clearwire (NASDAQ:CLWR) MVNO FreedomPop said its WiMAX-powered $89 Burst home router device is now available for purchase. The device brings with it new pricing options from FreedomPop, which is offering Burst owners 1 GB of free data per month.
FreedomPop's "freemium" business model is designed to entice users to the service with a free package of data in the hope that customers will purchase additional data allotments or other services from FreedomPop. The MVNO said Burst users who consume more than 1 GB can purchase additional data at $5 per GB. Users can also purchase a 10 GB package of data for $9.99 per month, with additional data beyond that amount priced at $5 per GB.
Beyond the data buckets, FreedomPop is upselling with faster data speeds. Burst users can purchase speeds of up to 6 Mbps for $14.99 per month and speeds up to 12 Mbps for $18.99 per month. FreedomPop currently offers 500 MB of free data to its existing customers, who can access the company's service through portable hotspots, USB modems and iPod touch cases. FreedomPop is planning to release a range of new products, including cases for Android phones and iPhones, in the coming months.
FreedomPop's Burst represents the company's attempt to break into the market for DSL and cable-based home Internet service, which FreedomPop said is worth $100 billion. Indeed, the company said that 70 percent of Americans use less than 10 GB per month on their home Internet service.
Earlier this year, FreedomPop CEO Stephen Stokols told FierceWireless that the company's free-to-paid conversion rate is 30 percent. He also said that 10 percent of the company's customers use more than their 500 MB free allotment per month, and therefore must pay overage fees. Stokols declined to say how many customers FreedomPop has.
Although FreedomPop's current products run on Clearwire's WiMAX network, the company is working to launch LTE service using Sprint Nextel's (NYSE:S) LTE network. Stokols recently disclosed that FreedomPop "slightly delayed" its tentative LTE launch from the second quarter of this year to the third quarter of this year. Interestingly, the company said that customers who purchase its new Burst router will be able to switch out their device for an LTE version at some point in the future. The company said users who wish to upgrade to LTE will be able to trade in their WiMAX-capable Burst for an LTE version of the device, and will receive an $89 credit toward the purchase of an LTE-capable Burst.
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