Owning a smartphone can be crazy expensive. There's the cost of the device itself, which runs upwards of $200 (subsidized) in some cases, plus monthly data fees. And when you're talking families of three or four people, well, things start to add up in a hurry. Enter FreedomPop, a freemium wireless data startup that wants to shake up the mobile scene by offering free mobile phone service.
For the low, low price of $0, FreedomPop subscribers get unlimited text messaging, 500MB of data, and 200 minutes of talk time every month. There are no long-term (or even short-term) contracts to sign, meaning you're free to quit at any time.
Surely there's a catch, such as paying a jacked up price for a smartphone, right? Not according to Forbes, which is reporting that FreedomPop will begin selling refurbished HTC EVO 4G Android phones, and possibly Samsung and LG handsets, for $99 to $199 off-contract. In essence, your upfront cost is the same as it would be on a subsidized plan for a high-end smartphone through one of the major wireless carriers, only you'd own the phone outright.
What if you need more than what the free plan allows? FreedomPop offers a 2GB data plan for $18 month; add another $10 for unlimited calling, if you need it. The same plan on Verizon (2GB data, unlimited voice and text) runs $100 per month.
FreedomPop is able to offer free and cheap plans by buying bandwidth wholesale from Sprint, which costs four or five times less than renting voice minutes. In addition, FreedomPop converts voice calls into data packets, which is then shuttled through its purchased bandwidth.
The other way FreedomPop can afford to do this is by offering $3.99/month add-ons, such as faster download speeds and rollover data.