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FreedomPop is an Internet service provider based in the United States providing paid and freemium service, founded in 2011. It was initially backed by Skype co-founder Niklas Zennstrom and his venture capital firm Atomico, and received $7.5 million in its first round of funding in 2012 from venture capital funds Mangrove Capital Partners and Doll Capital Management. FreedomPop has partnered with Clearwire and Sprint to provide free wireless data to users as well as text, plus to be able to provide voice and SMS text services.
In the early part of 2013, the company raised $4.3 million in new Series A1 financing from existing investors DCM and Mangrove Capital, bringing total funding to $11.2 million. In August 2013, the company officially crossed over the 100k subscriber threshold.
FreedomPop sells several mobile broadband devices for use with their service, including a 4G-only iPhone "Sleeve Rocket", the 4G-only Spot Photon, a 4G-only USB dongle called "Bolt",Sierra Wireless 3G/4G Overdrive Pro, A "SpotMiFi" 4G LTE hotspot, and a home broadband gateway called a "Hub Burst". In June 2013, FreedomPop announced that on strong margins in the data-only business, it would start offering full-service mobile phone with free voice, data, and text in late 2013.
In November 2012, FreedomPop began providing free and paid mobile wireless Internet services in the United States through wholesale Internet carrier Clearwire. The company later launched home broadband service, to compete on cost with home broadband. FreedomPop extended free wireless internet service nationwide to most Americans in April 2013 with its first 3G/4G hotspot, the Overdrive Pro. FreedomPop ended the partnership with LightSquared as a result of Federal Communications Commission (FCC) regulatory issues, and instead decided to partner with Clearwire. The company later also partnered with Sprint to provide nationwide 3G, 4G, and LTE coverage.
FreedomPop's business plan is to provide a limited amount of data (500MB) to users for free, while offering higher capacity plans for a monthly fee. They also sell additional data on a pay-as-you-go basis at rates between $0.007 and $0.02 per megabyte depending on which plan the customer is on, and allow users to trade unused data capacity with each other via a tool on the company's website. Additional revenue streams come from the sale of wireless accessories, per-minute and per-text overage charges on the voice service, and paid add-on services such as virus protection and usage alerts. Tony Miller, chief marketing officer, indicated in 2012 that the company believed 10-15% of users would opt for premium plans, but a subsequent report indicated the adoption rate for paid services is much higher, about 45%, with the company claiming gross margins over 50% on premium services. Miller also claimed in July, 2013 that FreedomPop's high-margin, recurring service revenues had achieved parity with its low-margin, one-time product revenues, which if true would suggest that the firm's business model has the potential to be sustainable.
FreedomPop is pursuing a freemium business model, where it provides a set amount of data to users for free, sells excess data at a nominal cost, and allows users to trade unused data capacities on a social network. Free Internet is FreedomPop's primary service though it has announced plans to offer a free mobile phone service in late 2013. After purchasing a FreedomPop device, FreedomPop users will receive 1 GB of data for free each month. Additional data will be available for $10–$20 per gigabyte. In addition to the free data that renews with each month, FreedomPop offers ways to earn free data through partner promotions, like signing up for trials of Netflix, or registering a domain at GoDaddy as well as through referrals to new users which can also earn up to 500MB each month, with each referral earning 50MB of data, up from the previous 10MB. FreedomPop announced Social Sharing features: its user dashboard shows a list of friends, with a graphic showing how much free data each friend has left that month, with a “Give” or “Get” button next to each name. Users can help others who are running out, or request data from those who haven’t used much. In April 2013 FreedomPop announced its first 3G and 4G nationwide hotspots on Sprint's nationwide network. In August 2013, the company expanded their service with the addition of LTE nationwide hotspots, but most customers have hesitated to buy 4G LTE hotspots, because of Sprint's very limited coverage of 4G LTE.
In a review of FreedomPop's core service, Time reporter Jared Newman reported that some service fees were not clearly noted on the homepage, noting that plans were advertised as “100% FREE” which were only free for the first month of service. However, FreedomPop does offers customers a 500MB free plan every month. Newman also reported about FreedomPop's active status fee, a $.99 charge for non-use of FreedomPop's free service, though he also noted that FreedomPop's fee structure is no different then the major carriers. FreedomPop has since rescinded the active status fee.
FreedomPop originally partnered with LightSquared, purchasing wholesale Internet services from them. This decision was met with some controversy. Commentators cited the ongoing FCC investigation as to whether or not LightSquared interferes with GPS frequencies. In early 2012, FreedomPop ended their partnership with LightSquared.