Can FreedomPop destroy pricing for AT&T And Verizon?

“Clogged networks have made wireless data a precious commodity, but one innovator group has a plan to not just cut costs for consumers, but bring them down all the way to zero,” Aabha Rathee reports for Wall St. Cheat Sheet. “FreedomPop is on its way to launching a free mobile Internet service for U.S. users this summer, a move that is likely to demand a change of strategy from established wireless providers.”

“FreedomPop will use Clearwire’s WiMAX network to give users one gigabyte of free mobile Internet access per month — more than most users currently consume,” Rathee reports. “The company plans to offer an Apple iPhone case that will provide access for mobile use and act as a hotspot for eight other devices, a USB attachment for use on laptops, and a Wi-Fi hotspot device that will be able to connect up to 20 devices to the Internet.”

“While FreedomPop users will also be charged for going over [their 1 Gb limit], the fee will be “cheap,” company marketing vice president, Tony Miller, told Technology Review. The fee may be lower than a penny per extra megabyte. Users won’t even have to pay for its devices, though they will be asked for a refundable deposit to prevent reselling and abuse, Miller added. Analyst Neil Shah told Technology Review that the company may soon have to partner with other mobile broadband partners because Clearwire’s range was still limited,” ,” Rathee reports. “Miller did not disclose who was behind the company or their revenue model, but said Skype co-founder Niklas Zennstrom was a backer.”

Read more in the full article here.

[Thanks to MacDailyNews Reader “Arline M.” for the heads up.]

20 Comments

    1. What about a case for my iPad with the service built in. I tried a Sprint Clear “hot spot” once, but had some issues in Vegas. 4Gk worked on one side of the strip but not other. Worked okay at home (Honolulu). Took it back for a refund after my trip. Plan too expensive for my limited needs when no traveling.

  1. Looking forward to this. We have a Clear tower on out school’s property. We use WiMax for failover and occasional load balancing on our network. Always great reception. We will have over 200 iPad users this fall; currently about 100 and probably near 100 iPhones on campus.

  2. Does anyone seriously believe there is such thing as free lunch? Do people really expect to get something for nothing? Look at Android market and all those free apps. Deluge of ads makes it quite annoying, not to mention bandwidth-hogging (all those ads diligently sending private data back to their hosts…).

    I can’t possibly imagine this initiative having ANY meaningful impact on the current mobile market in America.

      1. You comment still didn’t address my concern. Who pays for the free service? Is ‘Freedom Pop’ a charity, or a business? If charity, where does it get the massive funding needed to underwrite free mobile bandwidth (1GB per month per user!!). If business, how does it generate revenue to underwrite the free mobile bandwidth?

        Again, the no free lunch saying has yet to be disputed.

        1. It’s not that difficult a concept to follow. Apple does this by allowing free apps to have paid add-ons. The ones that will benefit by this are people who are occasional heavy users.

          Obviously, they’re counting on people using more than 1GB to subsidize the free users.

          1. I don’t think so. It is simply extremely unrealistic, for two reasons:

            1. Vast majority of current mobile users consume significantly less than 1GB of data; it is easy to assume that those interested in free would be precisely those who don’t use that much;

            2. The article stated that even if you exceed that 1GB, the “overage” fee will be insignificant, less than a penny per megabyte (i.e. less than $10 per GB). There is no way such fee could possibly generate enough revenue to cover the service.

            Something is simply not right here and the company is clearly NOT disclosing an important part of their business model. It is either a model based on massive advertising, or a Ponzi scheme. I’d love to be proved wrong.

      1. While I generally agree with your premise, I believe that there is also the “consultant” “the first hour is free” model on the market. Services like Dropbox where the first couple of gigs of space are free; they are counting on you liking it so much you sign up and pay for more.

        1. I agree that free samples can be a way to gain paying customers. They key difference is whether the products usefulness is being monetized or the user.

          I can’t imagine using g-mail, knowing Google might decide to analyze the content of my message to see if I should be served ads for chocolate or high heeled shoes. So I pretty much stay away from them.

          And that’s too bad, because the original goals of Google were great and they have a lot of smart, talented people working for them. But I have concerns how that work will be used. Once integrity becomes suspect, all is pretty much suspect. Unfortunately, I think they need to change their motto from “Don’t be evil” to “Probably not much worse that most”.

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