FreedomPop is hoping to grow its U.S. audience by offering zero-rated data from WhatsApp, enabling users to send texts, videos and other content without incurring data charges. And the MVNO may actually be beating WhatsApp to the punch.
FreedomPop uses Sprint’s network in the U.S. and offers a free plan that includes 500 MB of data, 200 minutes of voice and 500 texts per month. The company launched zero-rated data from WhatsApp in Spain earlier this year – although the companies don’t have a formal partnership – and CEO Stephen Stokols said it’s bringing the offering to the U.S. as a way to enable users to access mobile data without also paying for voice and text services.
“You’ve got WhatsApp usage growing in the U.S., and we think we can accelerate that by coming in and decoupling that bundle,” Stokols told FierceWireless. “In the U.S. you’re forced to buy unlimited voice and text; this is a data-only play, and it’s the first data-only play in the U.S.”
The move may also be a preemptive strike against WhatsApp, which has long been rumored to be considering launching an MVNO in the U.S. The social messaging company actually launched an MVNO in Germany two years ago, but that effort appears to have fizzled in the wake of its $19 billion acquisition by Facebook.
And WhatsApp may not be the only OTT messaging provider considering launching their own wireless services, Stokols said. “The OTT talk and text guys are all considering, ‘How do we move upstream,’” according to Stokols. “I think you’ll see some major OTT buys move into that market.”
FreedomPop, which has recently expanded into Europe, has raised more than $109 million in financing including a $50 million Series C round announced early this year. The company uses a freemium model to entice users, then upsells them into bigger packages or other value-added services such as selling additional local numbers for users in foreign lands or a new “safety mode” that prevents overage charges.
The company sells handsets as well as SIM cards enabling customers to activate their own phones. Roughly half of its U.S. customers pay something per month, Stokols said, and conversion rates in the U.K. and Spain are beginning to approach those in the U.S.
“Customers who are free usage are actually very low usage; they don’t cost us very much,” he explained. “Heavy users end up converting. It might not be a data plan (they pay for monthly); it might be something else.”
Stokols said he expects to partner with an additional major U.S. network operator in the near future, and he said FreedomPop may soon begin partnering with mobile network operators looking to tap the MVNO’s upselling expertise. Operators that grow their value-added revenues could lower their monthly price plans, he said, enabling them to better compete in the difficult U.S. market.
“Some of the carriers are actually talking to us about our underlying upselling technology,” he said. “We may start to power some of the major carriers’ upselling activities.”
MVNO FreedomPop rejects M&A offers, gets $30M in funding and plans for a second U.S. carrier partner
FreedomPop launches in Spain with zero-rated WhatsApp service
FreedomPop snares $50M in funding, expands operations in Europe