FreedomPop, the startup backed by Skype co-founder Niklas Zennstrom that aims to provide mobile broadband on a "freemium" model, plans to partner with another wireless carrier for wholesale access beyond LightSquared. Although FreedomPop has not announced a new wholesale arrangement, the development is troubling for LightSquared, which is still seeking regulatory approval to launch its service.
FreedomPop unveiled its intentions and its deal with LightSquared in December, but has been relatively quiet since then. Now, however, with LightSquared's status still uncertain, the company is likely looking to partner on a wholesale basis with Clearwire (NASDAQ:CLWR), Sprint Nextel (NYSE:S) or T-Mobile USA, according to a Forbes article.
"There are a lot of major carriers who want us on their networks," Tony Miller, FreedomPop's head of marketing and communications, told Forbes. "They're looking for wholesale partners that can add a lot of traffic." He said that the company is in talks with three carriers and could announce the new partner within weeks. Miller made similar comments to FierceBroadbandWireless last month.
FreedomPop intended to pay $7 per GB for access to LightSquared's network and would not want to pay more than $10 per GB. A key reason Clearwire, Sprint and T-Mobile appear to be the company's most likely partners is that they each have national "4G" networks and that AT&T Mobility (NYSE: T) and Verizon Wireless (NYSE:VZ) would charge more than FreedomPop would be willing to pay.
Miller noted to Forbes that FreedomPop's deal with LightSquared is not exclusive, and the one it intends to sign would not be exclusive either. "It could be a second network for us," Miller said of LightSquared's network, should LightSquared receive FCC approval to operate.
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 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.
- see this Forbes article
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