Sprint (NYSE: S) MVNO FreedomPop today announced it will begin selling a refurbished Apple (NASDAQ: AAPL) iPhone 5 for $349. The company also said it will provide service to customers who bring their existing iPhones to the MVNO. Further, in an effort to generate interest among customers who are still on a contract with other carriers, FreedomPop said it will provide free calling and texting services to any iPhone owner through its new over-the-top, FreedomPop-branded iOS app.
FreedomPop will sell a refurbished iPhone 5 for $349.
"It's a pretty big play for us to move into the iOS world," FreedomPop CEO Stephen Stokols said, noting that iPhones command around half of the U.S. smartphone market.
FreedomPop launched its first phone late last year, the HTC Evo Design WiMAX smartphones for $99 without a contract. The MVNO added the WiMAX-capable Samsung Galaxy S II for $169 in February. The company's launch of the iPhone represents FreedomPop's first LTE device; FreedomPop's service runs over Sprint's LTE network.
FreedomPop's service plan for the iPhone is the same as its plans for the Galaxy S II and Evo Design: Customers can get 200 voice minutes, 500 text messages and 500 MBs of data for free per month. Unlimited voice, text and data plans start at under $5 per month.
FreedomPop's goal is to sell 300,000 refurbished smartphones this year, generating annual revenue of $40 million to $50 million, the company told USA Today.
Stokols said that FreedomPop has purchased "thousands, not tens of thousands" of refurbished iPhone 5s for the launch. The company also has an additional 20,000 iPhones lined up to purchase if customer demand warrants additional units.
As for FreedomPop's OTT app, dubbed FreedomPop Free Voice and Text, Stokols explained that it represents a "Trojan horse" strategy for the MVNO. He said that the app is intended to generate interest in FreedomPop's service among customers of other carriers, in the hope they may eventually switch over to FreedomPop. Stokols said that the app will provide free calling and texting services, but will require customers to have some kind of data connection, either through Wi-Fi or cellular.
"That really opens it up for us," he said, noting that most active iPhones are locked into contracts. "Going after those is key for us."
Stokols also provided a general update on FreedomPop's progress in the market. He said the MVNO now counts "hundreds of thousands" of customers, a figure he said has doubled during the past two quarters. However, Stokols declined to provide the exact number of FreedomPop's customers.
Stokols said FreedomPop counts 70 employees, and said its revenues continue to increase, though he declined to provide specifics.
Interestingly, Stokols also said that FreedomPop--which so far has sold services exclusively through its website--plans to expand into brick-and-mortar locations in the coming weeks. He said the company expects to announce a resale deal through a major retailer, and also plans to sell services through smaller dealers.
"We are dipping our toe in offline (sales) this quarter," Stokols said, though he noted that he expects online sales to continue to account for the bulk of FreedomPop's efforts. "We're growing pretty rapidly online."
- see this USA Today article
- see this FreedomPop release
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