After proving that there’s actually a decent business in offering free mobile data, FreedomPop is now aiming to take its crazy business model even further by replacing cellular plans entirely.
The new (and so far unnamed) mobile service, set to launch late summer, will offer free voice calls and text messaging, all of which will run on top of the company’s free data service. No carrier required.
“Our end game was supposed to be the starting point,” said Stephen Stokols, FreedomPop’s chief executive, in an interview with VentureBeat. He explained that the company initially intended to launch with a service that would offer free calls and texts, in addition to data. But ultimately it was “too much for network partners to stomach out of the gate,” he said.
FreedomPop isn’t divulging many details on its total users and metrics just yet (mostly because it’s been slowly rolling out its service since last fall), but Stokols is quick to mention that the company is seeing gross margins of over 50 percent on its freemium products. Consumers come for the free data, but they end up spending money on additional services, like faster speeds and more data. It wouldn’t be a stretch to imagine the company offering similar premium options with this new service.
The company will offer 500 megabytes of free 4G data (the same as its current devices), 200 free anytime minutes, and unlimited texting as part of the service. FreedomPop users will also be able to call each other for free without biting into their voice call quota.
FreedomPop initially launched on ClearWire’s 4G WiMax network, but it recently began offering service on Sprint’s 3G network as well. Stokols tells me he initially wanted to wait until Sprint’s LTE network went live to launch the new mobile service, but he found the performance of Voice over IP services on its current networks to be good enough to launch much sooner.
FreedomPop also brought free calls and texting to its current devices as part of a partnership with TextPlus.
The company will offer older phones like the Samsung Galaxy S II and HTC Evo 4G with the service — mostly, because they’re pretty cheap right now. After all, anyone intrigued by a totally free mobile service likely won’t bother buying the latest and greatest superphone. You can also bring any existing Sprint devices over to the service.
“This is a full-on replacement for the carrier,” Stokols said.
The Los Angeles-based company has raised around $12 million so far from Mangrove Capital Partners and DCM.
Photo: FreedomPop’s initial iPod Touch case by Devindra Hardawar/VentureBeat