FreedomPop has started offering a brand new, annual plan for users who aren't big on surfing the internet on their phones, thus lowering monthly bills. For a yearly subscription of $49 (that's just about $4 a month) FreedomPop's users will have 1,000 minutes, 1,000 texts and 1GB of 4G LTE data available to them each month during the subscription period. According to FreedomPop, about a third of smartphone users in U.S. don't even user more than 1GB of data a month, so they believe this plan will offer a great alternative to costly monthly plans of other mobile provides. Besides offering a subscription, FreedomPop also offers inexpensive phones. Customers can choose between LG Tribute for $79 and Samsung Galaxy S5 for $149. Both devices come packaged with the aforementioned annual subscription.
California-based company FreedomPop is trying to be an alternative for users who don't need unlimited data plans and are tired of paying for their phone bills each month. Steven Sesar (COO and one of the founders of FreedomPop) explained that, with U.S. mobile prices coming down, the company should strive to drive the prices even lower and offer discounts on annual subscriptions similar to what other subscription-based services have been doing so far. Comparing FreedomPop's offer to the typical cost of monthly plans of major carriers, which usually goes for around $70, he added that for a similar price the customers can get both device and a mobile plan. The company claims it sees zero profit with this new service, but they rely on upselling additional services to the customers like Virtual Private Network (VPN) or international calls and, of course, additional charges if they go over their monthly quota.
So far, FreedomPop has been offering a free plan that included 200 minutes for voice calls, 500 texts and 500MB of data per month, as well as new and used smartphones on their marketplace. This strategy has brought in more than $109 million for the startup from Los Angeles. Partnered with AT&T, FreedomPop made quite a bite at the competition, slashing the price of a mobile plan to the level almost everyone can afford. It most certainly created a gap in the mobile market while also luring in the internet-centric users with competitive pricing models. The "first shot was fired," as FreedomPop's CEO said, and now it's up to other carriers to evaluate and offer similar plans to their customers.