The Telegraph technology, media and telecomm Editor Christopher Williams posted an article in the September 23rd issue notifying readers that U.S. mobile operator FreedomPop had ventured across the Atlantic Ocean to take on UK budget providers like Tesco Mobile and TalkTalk in a challenge to the lucrative mobile market.
FreedomPop is offering, after a one-time set-up fee of £7, a free basic monthly service that provides 200 minutes of calls, 200 texts and 200MB of data. Because making a profit is a necessity of business on androidcentral.com, FreedomPop is counting on their customers purchasing additional air time and media packages once they have used up their free allowance each month. The cost of these added packages is estimated to be between £4.99 and £16.99 per month.
As a bonus to earn additional free allowances each month, subscribers can participate in taking third-party surveys.
FreedomPop is essentially a Mobile Virtual Network Operator (MNVO). They will not own any infrastructure like mobile masts but instead will buy capacity on the Three network to give away or sell to their customers.
In order to reach a positive cash flow position, FreedomPop CEO Stephen Stokols said the company would have to attract only 50,000 UK customers. This figure is based on past history in the United Sates where half of their customers buy the extra capacity on a regular monthly basis.
Stokols was working for BT in London when he originally came up with the idea. When the BT board of directors passed on the idea, he took his concept to the United States and formed FreedomPop in 2011.
One method FreedomPop plans to use to reduce costs is to use Wifi networks in place of mobile networks to handle most of their traffic. The article stated that Mr. Stokols would travel to the UK soon to arrange a deal with his former employer BT Wifi network for around 5 million hotspots nationwide.
At first, only online applications will be processed for subscribers to the new service. Stokols is in talks with several major retailers for a street presence, but with early interest expressed by over 250,000 Britons, there’s probably no rush to head in that direction. In fact, with that many potential subscribers already showing interest in the mobile service, FreedomPop may have to put a cap on its customer base after only a few months of operation in order to manage its growth wisely.
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