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FreedomPop Hops On Sprint’s 3G Network

Achieves National Reach with Hybrid Hotspot That Rides the Clearwire WiMax and Sprint 3G Network 4/24/2013 5:56 AM Eastern

FreedomPop’s pursuit of cost-conscious cable and DSL broadband customers continued Wednesday with the debut of a 4G/3G hybrid hotspot that supports both Clearwire’s WiMax platform and Sprint Nextel’s 3G network, and gives the startup a way to fill in some significant service gaps.  The company is also developing products that will tap into Sprint’s Long Term Evolution (LTE) network.

Until now, FreedomPop’s product line has been a WiMax-only affair as the company pitches a mix of free and paid service packages.  Piggybacking on Sprint’s 3G network will give the budding mobile broadband service provider a national footprint.  FreedomPop estimates that the addition of 3G will extend its reach to 220 million Americans and roughly double its original coverage map.  

“It gives us the ability to go nationwide in a pretty aggressive way,” says FreedomPop CEO Stephen Stokols.

FreedomPop’s new device, called the Overdrive Pro, sells for $39.99, undercutting the company’s line of original WiMax-only devices, which sell in the range of $49 to $99. FreedomPop,  Stokols says, has extracted most of the margin out of the new 3G/4G product and therefore is “taking out as much friction out of it [FreedomPop’s service] as possible.”

The new device will support Freedom Pop’s variety of no-contract, month-to-month service plans. FreedomPop’s free plan provides up to 500 Megabytes of data before usage fees kick in. Its paid plans start at $9.99 per month for 1 GB, while its high-end tier runs $59.99 per month for 10 GB of data.

Stokols says FreedomPop is making money, with over half its users paying revenue each month, versus the 20 percent that the company had original anticipated.  The company, which counts on-the-move youths in the 18 to 28 age range and cost-conscious consumers among its key targets, won’t disclose a customer total, but Stokols says it’s “in the hundreds of thousands, not the tens of thousands.”

FreedomPop is working on a new set of hybrid products that will run on Sprint's 3G and 4G/LTE network.  FreedomPop considers Sprint its primary network, but “we might add one more,” Stokols says.

Founded in 2011 and backed by Skype founder Niklas Zennstrom, FreedomPop has 37 employees and has raised about more than $11.2 million so far. The startup is looking to close another round late this year, Stokols says.

September