FreedomPop Emulate the Obamaphone, Almost…Not

Well it is almost a free Obamaphone. But FreedomPop will eventually cost money and it is not funded by the government. It is funded by venture capital! Yet, there is a free service offered here until it runs out. Once the free service minutes are used up, there will be other plans offered to compete with TalkTalk and Tescomobile.

A United States mobile company is going to offer a 4G phone in the United Kingdom to compete with the local mobile phone service providers. With funds from some big investors, it is an international venture for expansion to British consumers. There is a required 7 Pounds set up fee with basic free monthly service. This includes 200 call minutes, 200 texts and 200 MB of data. Once the freebie plan is exhausted, which is the hook for an influx of new consumers who might have been with TalkTalk and Tesco Mobile, FreedomPop on itunes will sell plans between 4.99 and 16.99 Pounds per month.

There are still opportunities to earn free mintues, texts and data by doing surveys from third parties. FreedomPop is a MVNO or a Mobile Virtual Network Operator. This is the same with TalkTalk and Tesco Mobile. FreedomPop will lease their access to mobile masts and equipment. They will aim for those users who fall into the low budget service market. The business model has give-aways and sales plans coming from a purchase of capacity from the Three Network.

The brain child of this idea is Stephen Stokols who saw an opportunity while working for BT in the United States. He noticed that United States mobile users only tended purchase half of the capacity available to them. He is invested in the notion that he will only have 50,000 subscribers to give the threshold of positive cash flow in the UK.

Other factors that influenced Stokol to found FreedomPop was a rejection by the BT board members in 2011 to invest in a UK launch for plans for users to compete as FreedomPop is poised to do. Gavin Patterson was the chief executive of the BT retail division and was behind the decision to veto the transaction. Despite this, Mr. Patterson acted as an adviser to Stokol’s new venture up until he voluntarily stepped down because of the conflict of interest as FreedomPop was set to compete with BT’s operations in the United Kingdom.