FreedomPop, the free telecommunications service is expanding to the United Kingdom. With the $30 million dollars in venture capital raised from FreedomPop’s series B offering, the energetic mobile virtual network operator (MNVO) has launched its bid for a share of the UK’s telecom market. Tasco and Talk Talk mobile providers now have some serious competition from the Los Angeles based FreedomPop. FreedomPop offers free basic mobile phone services with minimal charges for add-on packages.
For a one-time only charge of £7, FreedomPop provides 200 megabyte of data, 200 texts, and 200 minutes of free mobile service to its customers. FreedomPop buys bandwidth from telecom companies with hard infrastructure and passes its savings on to its clients. An MNVO can offer cheaper services because they have no towers or hardware to maintain. Google uses the same idea, but FreedomPop will use WIFI to lower its costs even further.
FreedomPop makes its money by selling extended packages at reduced rates to clients who want to go beyond the basic services offered, and Stephen Stokols, CEO of the MNVO says about 50% of its customers buy in to add on packages which sell for about £4.99 to £16.99 in the UK. FreedomPop also offers third party surveys as a way for subscribers to purchase the additional services which include heftier data packages and extended minutes.
Three Network is currently the sole provider of bandwidth in the UK for FreedomPop, but the company is in negotiations with British Telecom to extend its services. The idea for the MNVO was created when Mr. Stokols worked for the current Brits Telecom CEO Gavin Patterson. FreedomPop wants to use British Telecoms WIFI and its five million hotspots to service the 250,000 UK citizens vying for the service. There is talk about having to cap subscriptions with the initial start up because of the demand for FreedomPop’s services.
Mr. Stokol and Mr. Patterson will meet this month, and hopefully come to an agreement before the service start up needs a cap. Mr. Patterson and Mr. Stokols aren’t strangers; they built FreedomPop together. Stephen Stokols came to Gavin Patterson with the idea for FreedomPop in the UK, and Mr. Patterson liked the idea so much he stepped down from his position with FreedomPop to bring British Telecom in on the UK start up of FreedomPop.