FreedomPop takes aim at carriers, Skype with international calling plans

Sprint (NYSE: S) MVNO FreedomPop is launching free international calling as part of its service, even to customers who do not have FreedomPop as their primary carrier. The company's salvo is aimed not just at traditional wireless carriers but also VoIP providers like Skype and Vonage that have made international calling their hallmarks. FreedomPop also announced new plans for its expansion into Europe.

Starting today, FreedomPop will give users who have the FreedomPop Free Talk and Text app for Android and iOS 100 minutes of free international calls each month to more than 30 countries, including Mexico, the UK, Canada, China, Hong Kong, Brazil and India. The service will expand to more than 100 markets in the coming weeks.

As with its main service offering, FreedomPop is running a freemium model for international calling. Customers who want more minutes can get 500 minutes for $5 per month, or unlimited international calling for $10 per month. The service is open to anyone who has the app--they do not need to be FreedomPop phone customers.

Additionally, FreedomPop is launching a service that will give its customers an international phone number--FreedomPop customers and their contacts can both call the number to place international calls at local rates. That service costs $8.99 per month; FreedomPop said it can help customers save hundreds of dollars per year.

FreedomPop CEO Stephen Stokols told FierceWireless he wanted to launch an "aggressive" and "disruptive" international calling plan. He acknowledged that offering a free service will cost the company money but said that the service could push more customers who are not FreedomPop phone customers to become ones, which would drive more revenue in the long run.

International calling plans from Tier 1 carriers are more expensive in some respects, though they are not all directly comparable to FreedomPop's offering. For example, for $10 per month, T-Mobile US (NYSE:TMUS) offers unlimited calling to landlines, unlimited mobile-to-landline calling to at least 70 countries and discounted calling rates to at least 200 countries. For $5 more per month, T-Mobile offers unlimited mobile-to-mobile calling to at least 30 countries and 1,000 mobile-to-mobile minutes per month to Mexico.

For $15 per month, Sprint lets customers call landlines in more than 60 countries without additional charges and call mobile phones in 35 countries without additional charges. Customers can also get low calling rates to the rest of the world, like 1 cent per minute to mobile phones in Mexico, as well as unlimited international texting to more than 180 countries.

Under AT&T Mobility's (NYSE: T) outbound international calling option, customers can call from the U.S. to any number in Canada, Mexico, and the majority of Latin American and Caribbean countries for $0.01/minute. Calls to the rest of the world can cost as low as $0.08/minute for $5 per month.

For $5 per month, Verizon Wireless (NYSE: VZ) says customers can call and text worldwide with discount voice rates in nearly 150 countries and that such plans save customers up to 20 percent on global services.

Stokols said FreedomPop's plans, especially the local phone number plan, are aimed primarily at immigrants, expatriates and customers with family and friends abroad. In terms of competing with carriers, he said FreedomPop's plans are a "no brainer" and that some people wind up spending more than $100 on international calling per month with carriers. At Skype, Vonage and other VoIP providers, he said, international calling has high margins.

"We think having a compelling international plan that will move more people to our underlying devices and services," he said, noting that the company has seen high demand in the U.S. Hispanic market for such plans.

Meanwhile, FreedomPop is also accelerating its international expansion plans. The company now has four new European carrier partners in five countries, including KPN and Deutsche Telekom's T-Mobile (FreedomPop already announced plans to launch with KPN in Belgium). FreedomPop declined to name its two remaining carrier partners in Europe. The company plans to expand to Spain, Austria, the Netherlands, and two additional countries to be announced later.

Further, FreedomPop expects to have eight carrier partners confirmed by year-end, which will provide wireless network access in 12 countries. FreedomPop aims to have its first country live by the end of first quarter of 2015, with most markets where it is expanding in Europe live by the end of next year.

Stokols said the first market that goes live may not be Belgium. Some operator partners will support FreedomPop's service in more than one country and some carriers will only be in one country. Stokols said there are currently "quite a few deals we're moving over the finish line."

Stokols also reiterated that the company currently has hundreds of thousands of subscribers and is on pace to hit 1 million subscribers by the end of 2015, and could hit that target earlier. He also said that the company aims to decide whether or not to sell itself by the end of 2014, reiterating that the company has received interest from multiple unnamed parties. He said that FreedomPop has commenced a formal process to decide whether to move ahead with a transaction but declined to comment further.

According to a USA Today report, which cited unnamed sources, Sprint is in talks with FreedomPop to about a potential acquisition. The report said the talks could lead to an investment, an acquisition or no deal. Further, the report added that a large U.S. technology company and a smaller wireless carrier are also potential suitors. An acquisition would likely value all of FreedomPop between $250 million and $450 million, while an investment would value it closer to $200 million, the report said. Sprint declined to comment, the report said.

However, Stokols told GigaOM that while FreedomPop is in formal talks with "a few" companies about a potential acquisition, Sprint is not among them. "We've gotten several inquiries on the M&A side, but nothing official from Sprint," he said.

For more:
- see this release
- see this USA Today article
- see this GigaOM article

Related Articles:
FreedomPop launches its own branded $89 Android phablet, targets low-cost device market
FreedomPop confirms M&A talks with second telecom company
'Major carrier' said to be considering acquiring MVNO FreedomPop
FreedomPop brings free calling, texting and data to tablets, will sell the iPad mini, Samsung Tab 3
FreedomPop expands to Belgium with KPN, plans to enter other European markets
Sprint MVNO FreedomPop launches $20 LTE plan, adds Samsung phones to lineup

Read more on