FreedomPop, the startup backed by Skype co-founder Niklas Zennstrom that aims to provide mobile broadband on a "freemium" model, announced a new deal to buy wholesale wireless capacity from Clearwire (NASDAQ:CLWR). FreedomPop had previously inked a wholesale agreement with LightSquared, which regulators have said cannot launch commercial LTE service.
In a statement, FreedomPop "guaranteed" that it would launch its service in the second half of 2012, though it did not give a specific date. FreedomPop said it will pay wholesale rates to Clearwire--most likely on a per GB basis--but did not provide any specific details of the arrangement.
At launch, FreedomPop will access Clearwire's mobile WiMAX network, which covers around 130 million POPs, according to a Clearwire spokesman. But FreedomPop said in its statement that "as Clearwire's planned 4G LTE Advanced-ready network comes online, FreedomPop expects to be able to offer users even faster speeds." A Clearwire spokesman declined to provide details. Clearwire has committed to transitioning from WiMAX to a TD-LTE network, though the company hasn't yet provided an exact timeline for that switch. Clearwire is scheduled to release its fourth-quarter results this afternoon, when it might provide further details.
FreedomPop has signaled that it was looking beyond LightSquared for potential wholesale partners, and last week seemed to indicate that it was in discussions with Clearwire, Sprint Nextel (NYSE:S) or T-Mobile USA. FreedomPop's agreement with LightSquared was not exclusive, and Tony Miller, FreedomPop's head of marketing and communications, told Forbes that the deal the company was looking to sign with a different carrier would not be exclusive either.
Little is known about FreedomPop's business model, other than that the company will not use advertising support to enable it to offer of free voice and broadband data over LightSquared's planned LTE network, nor will all of its services be provided free of charge. Miller told FierceBroadbandWireless last month that the company's revenue model will be "similar to those proved on the Web, whereby the heavy users subsidize the less active." He confirmed FreedomPop is pursuing a "freemium" model, where basic services are offered for free but premium services cost money.
For more:
- see this release
Special Report: FreedomPop founder cagey about revenue model for 'free' mobile broadband service
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