FreedomPop expands service to the UK, still deciding on M&A options

Sprint (NYSE: S) MVNO FreedomPop is embarking on its long-awaited international expansion by partnering with the operator Three in the UK. FreedomPop is also still evaluating a possible acquisition.

FreedomPop users in the UK who download the company's app will receive 200 MBs of data, 200 voice minutes and 200 texts completely free each month once they buy a SIM card for the service, which will also be free. The service will run on Three UK's network when users are outside of Wi-Fi coverage. FreedomPop is now accepting beta orders on a first-come, first-serve basis at FreedomPop.com/UK.

In July 2014 FreedomPop announced a partnership to ride on the network of KPN's Belgian unit BASE. However FreedomPop never launched service in Belgium, and last month KPN agreed to sell BASE to Liberty Global's Telenet for $1.5 billion (€1.325 billion).

FreedomPop CEO Stephen Stokols said that the company decided to launch in the UK as its first international market because it is a large and highly competitive market where switching costs for customers are low. "From an implementation perspective, just the fact that it's English makes it easier to work out some of the kinks," he added in an interview with FierceWireless.

Stokols said that Three's network delivers solid LTE speeds and has strong 3G coverage as well. "From a product perspective, the product will be better than what we have in the U.S.," he said.

In the U.S., FreedomPop has built its business model around a service that gives smartphone customers 500 MB of LTE data, 200 voice minutes and 500 texts per month for free. Beyond that, customers can pay $10 per GB of data or $20 per month for unlimited voice, texting and data. However, customers' data speeds are reduced to 3G speeds after the first 1 GB of usage.

Stokols said that UK consumers are getting less data than U.S. consumers because consumption patterns in the UK are different. The free FreedomPop plan in the UK will be targeted at entry-level mobile pricing plans in the UK that cost around $16 (£10) per month, Stokols said. "We offer a clear value vis-à-vis the low end," he said.

FreedomPop is not revealing what its pricing will be on top of the free offering in the UK, Stokols said. However, he said that when compared to any plan that offers less than 5 GB of data per month, FreedomPop will have the lowest pricing.

FreedomPop's business model focuses on getting customers to pay extra for additional services. In the UK, customers will be able to pay extra to roll over unused data and have anonymous mobile browsing. Importantly, customers will also be able to add a second phone number from more than 60 countries so that that friends and family outside the UK can call them at local rates. Customers can add U.S. numbers for around $3.15 per month.

FreedomPop has network deals in place in France and Spain, but Stokols said the company is going to make sure its business model in the UK is sound before expanding to other countries. He said FreedomPop might launch another international market in three months or so. Stokols added that the company aims to be in two or three international markets by the end of 2015 and 15 markets by the end of 2016, with expansions possible in Latin America and Asia.

"Part of what makes us different is we're software centric," Stokols said, so the company can expand globally "with few constraints."

FreedomPop also announced a new product called Jetsetter that will give users 100 MB of free high-speed data per month initially for use in the UK, France and Spain. The service is still in testing and customers can request the product. Stokols said that the service will expand to cover 20 countries within a year.

Regarding FreedomPop's long-running debate over its future, Stokols said that "we have an M&A option and a funding option." The company has been conducting due diligence on both options and needs "to make a call about which one." Either way, he said, the company will have capital to keep expanding.

"If we wind up going down the M&A path, the acquirer is not looking to integrate" FreedomPop into their business, Stokols said. The thinking, he added, would be, "let's build out the FreedomPop brand and fuel it."

For more:
- see this release
- see this Re/code article
- see this TechCrunch article

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