FreedomPop launched a year ago with a noble mission: that access to the Internet is a right, not a privilege. The company made a splash with a 4G hot spot that offered a limited amount of free data with the ability to purchase or earn more by completing partner offers. But a hot spot was a specialty market, and the objective was always to change the telecom industry. Celebrating its first birthday, the company has debuted a freemium-based mobile phone service.
"We went to market with a lower-risk product: a data hot spot," cofounder and CEO Stephen Stokols told Fast Company. Despite spending little on advertising, FreedomPop acquired 100,000 subscribers in its first year, helping validate the business model and convince investors that the company should focus on phones. "At the end of the day, the hot spot is a niche. It's a big niche at $5 billion, but it's not the $200 billion market we're trying to disrupt," Stokols said.
Similar to FreedomPop's other products, which also include an iPod Touch case and home router, the company will provide a set amount of free 4G service. With the phone plan, that's 500 MB of data, 500 text messages, and 200 minutes available free on Sprint's network. Unlimited voice and text messaging can be added for $11 a month. At launch, the service will be available with a high-quality, refurbished HTC Evo Design smartphone sold for $99. "It's how we're able to offer a $300 phone for $99," Stokols said. FreedomPop intends to add more Android devices to the lineup, but high-end phones, such as the Galaxy S 4, will be sold at a premium. In a few weeks, it also plans to open a bring-your-own-device program, so consumers can use FreedomPop on their existing Sprint phones. The hope is to offer service on iPhones as well, but no timeline has been announced.
"Our mission is to ensure everyone's connected. We have a side motive as well: to disrupt the bloated wireless industry where a couple guys like AT&T and Verizon are making tens of billions in profit," Stokols said. Though FreedomPop already has 100,000 subscribers, the aim is to add 10 million to 15 million over the next year. Increasing the company's footprint by a magnitude of 100 is a lofty goal, but Stokols said it's how FreedomPop intends to change the wireless market. "Our overarching objective is to become one of the top four carriers."