FreedomPop officially launched its free mobile service in Spain as it continued expand its footprint in Europe. The MVNO is also touting a new zero-rated data offering for any usage of WhatsApp, which it says accounts for 90 percent of texting in Spain.
FreedomPop offers limited buckets of free voice, text and data, encouraging its users to buy value-added services such as additional data, a local global hotspot and local numbers from some countries that can be used to receive calls in other markets. Like its basic plan in the U.S., FreedomPop offers 500 MB of data, 500 texts and 200 minutes of talk, although U.S. users can't get free access to WhatsApp – at least not yet.
The MVNO claims more than 1 million customers, almost half of whom pay at least something regularly.
"With more than 70 percent of Spain's mobile consumers using WhatsApp, it has completely cannibalized traditional mobile services in Spain and shaped a unique opportunity for companies looking to embrace the new OTT world we live in," said FreedomPop COO and co-founder in a prepared statement. "We're creating a new mobile business model by leveraging WhatsApp's success to ensure anyone can communicate 100 percent free, simply by covering the data bill for WhatsApp."
Indeed, while WhatsApp isn't a formal partner of FreedomPop, the offering is a natural extension of the MVNO's strategy of footing the bill for fundamental – and relatively cheap – wireless services in the hopes that customers will pay out of pocket for more valuable offerings. Nicolas Constantinopoulos, who oversees FreedomPop's international businesses, told FierceWireless in February that the company had seen a 48 percent conversion rate from free to paid services in the U.S., and a 40 percent rate in Europe.
"And the people who convert, they remain there," Constantinopoulos said at Mobile World Congress in Barcelona. Those who use only free services are an acceptable cost of doing business, he explained, adding a reasonable amount to the cost of customer acquisition. And in mature markets in Europe and elsewhere, operators have begun to embrace MVNOs because they provide a new way to expand their offerings where the saturation point is being reached and new smartphone users are rare.
FreedomPop announced a $50 million round of funding in January, bringing its overall funding to more than $190 million. The company plans to continue its European expansion and has partnered with Axiata, a large Asian telecom group, to jointly develop products and services that could also be brought to Asia and South America.
And it could build upon its zero-rated strategy to offer users free data on other popular apps in the U.S. and elsewhere, potentially disrupting the traditional pay-per-byte model employed by carriers. That strategy would be something of a twist on Binge On, in which T-Mobile pays the freight of having video from specific content providers delivered to users without the used data coming out of their monthly allotments.
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