Shedding some light on a telecom industry mystery, a FreedomPop executive opened up in a Forbes interview, laying out the company’s plans to launch a “free” national mobile broadband service. The company — whose backers include Atomico, the venture capital firm of Skype and Kazaa co-founder Niklas Zennstrom — is on track for a summer launch, FreedomPop’s head of marketing and communications Tony Miller told Forbes.
FreedomPop’s 4G mobile broadband service will have a nationwide, or nearly nationwide footprint, according to Miller — although the company, which initially planned to use the LightSquared network, is still lining up a backup plan. Light Squared’s plans to roll out a nationwide 4G network are in jeopardy because of concerns that its network interferes with global positioning systems.
FreedomPop is working around the lack-of-network-infrastructure issue. The company has been talking to mobile broadband service wholesalers and wireless carriers about renting network capacity, and expects to announce a new partner in coming weeks, Miller said.
FreedomPop’s “free” business model is based on generating revenue via incremental charges for the 10%-15% of customers the company expects will opt for premium mobile broadband services, a model akin to that used by online data storage service Dropbox. Paying customers will essentially subsidize free users. Though it will sell advertising, FreedomPop doesn’t expect ad sales to generate as much revenue as the premium services.
All customers will have to pay deposits for three devices: a plug-in USB dongle, a Mi-Fi mobile hotspot that enables users to connect multiple devices to FreedomPop’s network, and “a third, mystery gadget that Miller would only describe as ‘innovative,'” Forbes reported. Management was originally considering charging customers a deposit of $49, but they’re trying to get that as low as $29.
Shifting its ideas regarding FreedomPop’s expected key customer base, management believes low-end home consumers, high-mobility prosumers and small businesses will be most attracted to the service. In its initial public statements, the company said underserved and rural area consumers would be its core customer bases.