(Image Credit: alexsl)
Budget MVNO FreedomPop is set to challenge traditional mobile billing with a “WiFi first” smartphone developed in collaboration with Intel. FreedomPop already offers a free SIM that includes 200 minutes, 200 texts, and 200MB of 4G data each month, applying reasonable charges only when customers exceed those allowances.
Many users today rely more on OTT (over‑the‑top) apps like WhatsApp and Skype for calls and messages rather than conventional minutes and texts, which increases data usage. As a result, some subscribers often exceed the 200MB included in FreedomPop’s basic plan.
However, the growing availability of public and private WiFi hotspots means users can avoid cellular data for much of their usage. To take advantage of that trend, FreedomPop and Intel plan to launch a smartphone in 2016 that prioritizes connecting to WiFi whenever possible and switches seamlessly to cellular networks only when necessary.
Reports indicate that users will not face additional charges when the device transitions from WiFi to cellular coverage, preserving predictable costs while shifting the primary data load onto WiFi networks.
Although the device will be exclusive to FreedomPop in markets where the MVNO operates, it will also be sold in countries where FreedomPop does not yet have a presence.
This strategy raises questions about FreedomPop’s revenue model. In the United States, FreedomPop has a partnership with Sprint and offers unlimited access to Sprint’s WiFi hotspots for $5 per month — a modest price compared with many traditional mobile plans. Relying predominantly on WiFi for traffic could reduce FreedomPop’s operating costs, making such low‑cost plans more sustainable.
In the UK, another market where FreedomPop has launched, the MVNO uses Three’s mobile network through a partnership. Three has also been expanding its WiFi capabilities, for example with the inTouch service that lets customers use their plan allowances for calls and messages over WiFi.
FreedomPop is reported to have received investment from Intel Capital, Intel’s investment arm, to work with an unnamed device manufacturer on the new smartphone. While the handset will be sold exclusively through FreedomPop in territories where the MVNO operates, it will also be available in other countries to reach a broader audience.
Do you think FreedomPop’s “WiFi first” model is disruptive? Let us know in the comments.