FreedomPop, a scrappy new entrant in the mobile broadband space, is spreading its wings with the launch of a hot spot device targeting wired broadband customers. FreedomPop, founded in 2011 and based in Los Angeles, is accepting pre-orders for its Hub Burst home modem, which is scheduled to ship in January. It has been shipping devices and conducting beta testing since October.
“Major broadband providers, including Time Warner Cable, AT&T, Verizon and Comcast, are pillaging consumers, charging in excess of $500 per year for home Internet,” said Stephen Stokols, CEO of FreedomPop, in a statement. “FreedomPop’s early successes had validated consumers who are looking for more convenient and affordable ways to consume data. We’ve already given away more than 15 million [megabytes] of free data and are expanding our beta to meet the increased demand this holiday season.”
The company is backed by Mangrove Capital, DCM and Atomico.
FreedomPop offer includes 500 megabytes of data for free each month; people who take advantage of the current pre-order offer will get 1 gigabyte of data per month at no charge. According to the company, “users will also have the ability to earn unlimited data by adding contacts to their network and engaging in partner promotions.”
Customers pay $89 for the wireless modem and router that is currently compatible with Clearwire’s WiMAX network, and can sign up for a free data plan and earn additional data by requesting it from friends’ allowances or by signing up for offers or making purchases from FreedomPop’s advertisers. The company also offers prepaid plans for heavier users, starting at a fee of $10 per month for 10 GB.
Along with Clearwire’s WiMAX network, FreedomPop is also slated to add LTE coverage from Sprint Nextel in early 2013. The company is targeting households with low data usage who would be interested in cutting their Internet bills. Clearwire’s current WiMAX network is limited to covering approximately 130 million potential customers, with the company not expecting to add to that coverage as it shifts its focus to LTE technology.
“The median American household uses under 5.5 GB per month at home, yet spends over $50 for Internet service,” said Stokols. “FreedomPop gives these users an opportunity to save hundreds of dollars per year at a fraction of the inconvenience, especially for more moderate Internet users.”
The idea of exchanging attention and time with advertisers to lower wireless bills isn’t new. Virgin Mobile began offering its Sugar Mama option in 2006 offering discounts in exchange for customers interacting with ad materials, and the company now also has a “Fund My Phone” app where people can earn airtime by encouraging their friends to watch ads as well.
