Earlier this week, NetZero launched a new freemium mobile broadband service using Clearwire’s WiMax 4G network. Although NetZero is the first U.S. company to launch a “free” 4G service, it isn’t going to be the last. Skype founder Niklas Zennstrom has begun work on a similar service called FreedomPop that will launch this summer.
FreedomPop plans to offer more monthly data for free than NetZero’s paltry 200MB. It will also target iPhone owners as a major part of its user base.
FreedomPop has been pretty tight-lipped about exactly what it will offer beyond announcing that it plans of offer all American’s free mobile broadband. To call the startup’s website minimalist is an understatement – it provides little more than a contact form to fill out if you want to get updates about the service and a basic definition of what broadband and mobile broadband.
More details have came to light this week in the wake of NetZero’s announcement, however.
Like NetZero, FreedomPop will use Clearwire’s WiMax network for its 4G service. That means, as with NetZero, you’ll need to live in one of the 82 markets where Clearwire has rolled out WiMax service. Since the company is transitioning to LTE as a 4G standard, it’s pretty much certain that expansion of WiMax to addition cities isn’t going to happen.
Like NetZero, FreedomPop will offer a personal hotspot device. The hotspot device will essentially be loaned to users with a deposit of less than $100, which will be refunded if a user discontinues service and returns it. That’s an interesting approach, and it’s more similar to how wired broadband users tend to operate (providing a cable or DSL endpoints to users and then taking them back if a user cancels his or her account) than the device sales approach used by mobile carriers.
One hotspot that the company plans to offer is that of an iPhone 4/4S case. The case would provide a 4G connection for the phone (and likely to other devices as well) but it will be a data-only option with no voice or messaging capabilities built-in. While the iPhone case is the only hotspot so far discussed, the company will probably offer other devices like a standalone hotspot or USB dongle for notebooks.
FreedomPop will offer a single plan that gives users 1GB of data per month for free. Overages will be charged at a rate of one penny for 1MB of additional use, which works out to $10/GB. That’s less expensive than NetZero’s paid plans as well as the 4G iPad plans from both Verizon and AT&T. The billing of overages based on 1MB also means that fees will be kept inline with use. The company plans to eventually offer other premium and add-on services that it expects to appeal to 10% to 15% of users as a revenue source.
All in all, it looks like FreedomPop could be a good choice for many users, but it may suffer from some drawbacks like Clearwire’s limited WiMax coverage and the decision to rely on on WiMax rather than LTE. It’s also likely to launch pretty close to the next generation iPhone, which will almost certainly ship with LTE.