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FreedomPop’s free mobile service is about to get more tempting.
Today the company announced that it has rolled out its service to Sprint’s LTE 4G network, along with a new LTE hotspot. As with all of FreedomPop’s other devices, you’ll be able to get 500 megabytes of 4G service for free, while additional bandwidth and services (including 3G roaming) will cost you extra.
What took it so long to get to LTE? Stephen Stokols, FreedomPop’s chief executive, tells me the company was waiting for Sprint to expand its LTE rollout. Now that Sprint has merged with Japanese carrier Softbank (in a deal worth $21.6 billion), the carrier has begun to accelerate its LTE plan. Had Sprint sold to Dish, Stokols thinks the LTE rollout would have been “far more uncertain.”
“Guys like Sprint who have 90 percent of the same cost base to build up a network as Verizon or AT&T, they need a successful massive wholesale partner like us to have the same economics,” Stokols said.
Sprint’s LTE network could make FreedomPop’s service a more tempting offer for consumers. The company originally launched on Sprint’s WiMax 4G network, which is significantly slower and doesn’t have much coverage outside of major U.S. metropolitan areas.
FreedomPop’s new hotspot, the FreedomSpot 5580 LTE, can connect up to 10 devices at the same time (though that will likely eat up your free data pretty quickly). It has an OLED display and around 10 hours of battery life. The same hotspot typically retails for around $250, but FreedomPop is offering it for $150.
At this point, we’ve seen plenty of press releases from FreedomPop (the company also recently announced an unnamed service that will offer free voice calls), but little in the way of actual user metrics. When pressed for more hard data, Stokols revealed that FreedomPop has seen sales in the “six figures,” while new subscriptions are growing 15 to 20 percent a month. Revenues are growing 20 to 25 percent per month, and around 45 percent of users are paying for some sort of additional service.
In particular, Stokols said customers are flocking to the company’s additional mobile services, rather than just paying for more data. Its most popular service lets you roll over your unused free mobile data (up to 20 gigabytes worth) for $3.49 a month.
In an effort to keep its customers happy, FreedomPop also promised in April to swap out older devices to newer models that support both 3G and 4G networks. Stokols admitted that process hasn’t begun yet: “We’ve been pretty slammed, we’re selling more 3G/4G devices than we have inventory, it’s a struggle.”
The company is doubling its customer service representatives this month, and it hopes to work out a process for swapping out older devices within the next few months. I’ve talked to several FreedomPop customers who’ve been annoyed by the company’s slow service and unresponsive customer service agents, so the additional staff should help out quite a bit.
“We totally underestimated the challenge, especially when you’ve got physical devices in the world,” Stokols said. “You’ve got logistics and all kinds of elements learned the hard way … it’s been a painful few months as we’re ramping growth.”
Los Angeles-based FreedomPop has raised $16 million so far (it grabbed $5 million just last month) from DCM Capital and Mangrove Capital.
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