June 5, 2013
Telecom company FreedomPop plans to sell refurbished HTC EVO 4G Android phones with no contract and at a competitive price point. Along with their phone, subscribers will receive 500 megabytes of 4G data per month, unlimited calls to other FreedomPop cell phones, 200 anytime minutes and unlimited texting.
The company claims to be “taking (money) back” from larger cellular carriers like AT&T, Verizon and T Mobile.
“This year, Americans will give wireless carriers over $200 billion for cellular service,” a video on the FreedomPop website says. “That’s $550 million each day, that’s $23 million each hour.”
According to an article on Forbes, FreedomPop is able to offer the service because it converts voice calls into data — the same kind of technology programs Skype uses. The company purchases bandwidth wholesale from Sprint and plans to make revenue from selling optional add-ons to its customers, including larger data packages and unlimited calling.
The average American uses about 200 minutes of voice and 500 megabytes of data a month, so an estimated 50 percent of FreedomPop consumers would be using the service free-of-charge after their initial phone purchase.
Time, however, calls the operation “shady,” citing hidden costs that users may be unaware of when they sign on with FreedomPop.
For example, if customers use less than five megabytes of data per month, FreedomPop charges 99 cents for an “active status fee.” The company also automatically charges $10 once a user reaches their last 100 megabytes of data to re-fill their plan.
“FreedomPop does give subscribers a chance to opt out of automatic refills on the final service activation page, but the wording (“To ensure uninterrupted service, top up my freedompop account”) is vague. It doesn’t say that the charge is recurring, nor does it mention the 100-MB trigger,” Time reports.
Additional “free” offers are thrown at users as they make their way through the sign-up process, the article adds, with additional fine print that points out the offer is only free for one month.
Nonetheless, Time does admit that it’s entirely possible to use FreedomPop’s “free” offer, as long as the user is familiar with the company’s policies and opts out of automatic re-fills and other offers.
FreedomPop’s CEO maintains the company is changing the cellular landscape for the better.
“The quality of over-the-top VoIP services is now at a stage where we can deliver the major mobile services completely free to consumers. FreedomPop is changing the mobile market for good with the sole intent of bringing better value to the consumer,” said FreedomPop CEO and co-founder Stephen Stokols in a press release. “FreedomPop’s mission is to ensure that everyone has access to affordable, convenient and essential communication services. With this launch, we’ve just taken a very big step towards delivering on this promise.”
FreedomPop’s new service will be available later this summer.