U.S.-based MVNO FreedomPop this week brought its free mobile service to the U.K., hoping to succeed where many others before it have failed.
Launched on 3UK’s network, the operator is offering three levels of service, only one of which – a ‘Basic’ price plan that comes with 200 minutes, 200 texts, and 200 MB of data per month – is actually free.
The other two come with price tags and are called Premium 1 GB and Premium 2 GB, and unsurprisingly offer 1 GB and 2 GB of data respectively per month.
Premium 2 GB also comes with unlimited voice and SMS and a monthly charge of £11.99, while Premium 1 GB comes with 1,000 minutes and 1,000 texts, and costs £8.99; however, an introductory offer will see the first 10,000 customers to sign up to it get their first month for free.
FreedomPop customers can also earn unlimited free data in return for participating in market research by filling out surveys and downloading coupons.
In addition, FreedomPop is also rolling out value-added services (VAS), including the ability to carry forward up to 500 MB of unused data per month to the next billing cycle and share it with other FreedomPop customers. 20 GB is the maximum amount of unused data that can be accumulated and the service costs £1.49 per month.
Even basic services like voicemail and usage alerts cost £0.99 per month each on all three price plans.
"Similar to the U.S., FreedomPop will deliver unprecedented value to consumers with an easy-to-use, high-quality mobile service. We believe everyone should have access to mobile services, and we’re going to make that a reality in the U.K.," said FreedomPop CEO and co-founder Stephen Stokols, in a statement on Tuesday.
FreedomPop is no doubt confident that enough customers will pay for the extras in order to cover the cost of providing a free basic service.
However, others have attempted the same feat unsuccessfully, albeit with a heavier focus on ad-funded business models.
The first was Blyk, which offered free service to 16-24 year olds provided they interacted with mobile ads. It signed up 200,000 subscribers during its first year of operation and served 2,000 ad campaigns, with an average click-through rate of 25%.
However, Blyk could not maintain the momentum, and there were questions about the value of a price-sensitive customer base to advertisers. It shuttered its U.K. MVNO business in July 2009.
Then there was Samba Mobile, another ad-funded free MVNO that rewarded customers who interacted with campaigns with mobile data. However, after grappling with the high wholesale cost of data it failed to negotiate a new deal with its network provider and closed down in April 2014.
There was also Ovivo Mobile. Hosted on Vodafone’s network, it ceased trading in March 2014.
Its cheapest tariff came with no monthly charge and offered 300 minutes, 300 texts, and 500 MB of data. Customers paid a one-off fee of £20, £15 of which was available as credit in the event they exceeded their bundle limit. Users would occasionally be taken to Ovivo’s online portal where they were shown adverts. The more data that customers used, the more often they were served adverts.
Meanwhile, FreedomPop is keen to expand into new markets. It aims to launch in a further seven countries over the next 12 months and to over 20 by 2017.
