FreedomPop expands to Belgium with KPN, plans to enter other European markets

Sprint (NYSE: S) MVNO FreedomPop is expanding its business internationally, and has inked a deal to ride on the network of KPN's Belgian subsidiary BASE as part of a wider strategy to move into Europe and other markets. FreedomPop plans to expand to the UK, Germany, France, Spain and the Pacific Rim by brokering deals with additional carrier partners in the future.

FreedomPop will not offer devices internationally the way it does in the U.S. Instead, FreedomPop will be selling SIM cards directly, and the company is not using KPN for distribution. A company spokesman said the SIM cards will be free and come with the free data plans. Users can put the SIM card in their device, download the over-the-top FreedomPop Free Voice and Text application, and the service will be running, the spokesman said. Consumers can use the app to get free data plans and voice and text plans.

The company said that although its rate plans will differ slightly from market to market it plans to offer its standard plan of 500 MB of free data per month. FreedomPop said it will give U.S. users access to international SIMs when they travel abroad.

In the U.S., FreedomPop customers can get 200 voice minutes, 500 text messages and 500 MB of data for free per month. Unlimited voice, text and data plans start at under $5 per month.

The expansion to Belgium comes a little more than two months after FreedomPop CEO Stephen Stokols indicated the carrier would expand internationally and use a SIM-plus-OTT-app strategy.  

In an interview with FierceWireless, Stokols said that there was "mutual interest from the get-go" with KPN but that the negotiations took several months. FreedomPop chose KPN and Belgium for several reasons, he said.

KPN operates in multiple countries, including France, Germany, the Netherlands and Spain. Belgium is also ideal for testing a service, Stokols said, because it has a relatively small population, high mobile and credit card penetration rates and is SIM-card-centric. He said if the service can succeed in Belgium that will be a positive indication that it can succeed in other European markets.     

"Enabling innovative business models with our mobile network is a key part of KPN's wholesale business strategy," Jos Donvil, CEO of BASE, said in a statement. "FreedomPop represents the kind of innovative service model that will deliver both growth and value."

In terms of expanding to other countries, Stokols said FreedomPop is looking for markets that are mature in terms of mobile penetration as well as network technology. That approach will leave out some large markets like India, where Stokols said there has been strong interest for a service like FreedomPop but which also has low average revenue per user and lacks widespread LTE deployments.  

The U.S. is unique, Stokols said, in that it is very device-centric. By using a SIM-card model he said FreedomPop could scale its business internationally with greater ease.  "We're not going to get into device game" internationally, he said, because the company does not want to deal with international device logistics. The SIM-plus-OTT-app model reduces friction, he said.

As for which carriers will be FreedomPop's partners in other markets, Stokols said the company is in negotiations with multiple operators but that "in almost all cases the traction on the carrier side is with the No. 2 or 3 carrier and the No. 1 is resistant." That's generally because the No.1 operator in a market does not want to dilute their own brand, he said.

Stokols said he had no specific timeline for when FreedomPop will expand beyond Belgium, but that it would likely not happen until early 2015. "It depends on the success and speed of the Belgium test," he said. However, once FreedomPop does start expanding to other markets it will do so very rapidly with a new market every month or two. He also said that FreedomPop could eventually get "aggressive" in parts of Asia and South America.  

In May, Stokols said FreedomPop was considering a partnership with either AT&T Mobility (NYSE: T) or T-Mobile US (NYSE:TMUS) to add a SIM-based carrier to its roster of partners. He said he has no firm timeline for when that might happen but that "it's progressing. A second U.S. carrier is moving along."  

Stokols also declined to say how many users FreedomPop has, though the company confirmed in February that it was at least a six-digit figure. He said the company has seen "pretty significant monthly numbers" and has had "consistently 15-20 percent month-over-month growth."

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