FreedomPop eyes ad revenue, plans back-up network to LightSquared

FreedomPop's enigmatic plan to offer free LTE broadband service across the United States later this year appears to be morphing, with advertising support for the service now firmly on the table and LightSquared's role as network provider apparently off of it for now.

Forbes interviewed Tony Miller, FreedomPop's head of marketing and communications, who confirmed Los Angeles-based FreedomPop still envisions a "freemium" business model in which customers who pay for premium services will subsidize the majority of customers using FreedomPop's minimalist broadband services. According to the Forbes article, FreedomPop, backed by Skype and Kazaa co-founder Niklas Zennstrom, will include advertising as "a part of FreedomPop's service but Miller said ads won't generate most of the company's revenue." It may be a matter of semantics, but Miller previously told FierceBroadbandWireless via email, "We will not serve ads, can't get into too much detail here since the revenue model is part of the innovation we are delivering."

FreedomPop also expects to incorporate viral/social sharing into its service, offering incentives for users that refer friends.

Miller said the startup hopes to introduce service mid year, with June being the earliest launch period. But FreedomPop expects to announce a new wholesale broadband wireless network partner in coming weeks, given that its original choice, LightSquared, is mired in regulatory delays. FreedomPop's deal with LightSquared is not exclusive, and the one it intends to sign with another network operator would not be exclusive either.

Miller told FierceBroadbandWireless in December 2011 that FreedomPop's launch timeline "depends on which wholesale network we partner with as contingency to LightSquared." At that time, he said FreedomPop was in discussions with three of the four major 4G network providers.

FreedomPop is revealing more about its planned devices and deposit rules. A dongle, MiFi-like mobile hotspot and an "innovative" mystery gadget will be offered. Users will have to pay a deposit to get either of the access devices. The company wants to price the deposit at $29, down from the $49 charge it initially envisioned.

If FreedomPop's plan gains traction, it has the potential to seriously disrupt the U.S. mobile market. Witness the upheaval caused by Iliad's Free Mobile in France, where the company's low-cost price plans have brought it 3 million subscribers since it launched a few weeks ago and have utterly shaken up rivals' high-price business models.

The idea of offering free mobile broadband service in the U.S. market is not new. One of the most well-known plans was generated by M2Z Networks, fronted by former FCC official John Muleta, who tried for years to get the FCC to devote spectrum to the company's plan to offer free mobile broadband to all Americans. The effort collapsed in 2010.

For more:
- read this Forbes article
- see this release

Related articles:
FreedomPop founder cagey about revenue model for 'free' mobile broadband service
LightSquared presses FCC for stricter GPS device standards
French MVNOs angered by Free Mobile's wholesale rates
Have we seen the last of M2Z?

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