How Skype’s Co-Founder Hopes to Make Money Giving Away Mobile Broadband
As he has proved with Kazaa, Skype and other projects, Niklas Zennstrom likes shaking things up.
His latest venture, FreedomPop, continues in that tradition. Due to launch later this year, the service will offer users a variety of options to get mobile data for their phones, tablets and laptops, at little or no cost.
FreedomPop isn’t building a network of its own, but rather buying from wholesale provider Clearwire, among others.
The way FreedomPop sees things, cellular service is already becoming a commodity — so why not push things along a little faster? Its plan is to give away mobile broadband and look to make money in other ways, through a variety of other services. The company, he said, is modeled more on Internet ventures such as Dropbox and Zynga than on the carriers with which it competes.
“We call ourselves a Webco versus a telco,” FreedomPop Marketing VP Tony Miller told AllThingsD. “We’re trying to build something more interesting.”
Miller says FreedomPop has quietly tested more than 100 services under another name, winnowing down to seven or eight paid services that it plans to offer at launch.
FreedomPop will offer customers at least three options for connecting to its service at launch — a USB connector for laptops, a mobile hotspot, and a case for the iPhone that both connects the phone with data and acts as a hotspot for other devices. The company also wants to build a case for the iPad, noting that some 80 percent of the Apple tablets are used only with Wi-Fi, creating a big opportunity.
In its basic plan, FreedomPop will give users at least 1GB of data for free, charging about $10 for each additional gigabyte. Other plans will offer more data for rates well below those typically charged by the major carriers.
“We’re commoditizing it even further,” Miller said.
There’s a heavy social component to what FreedomPop is doing, Miller said. Users will be able to pool their data, with those who have megabytes to spare able to share them with friends in need. Customers will also get additional data to use by bringing along their friends, and friends will be able to see each other’s location and presence data.
Although it has started sharing a few details, FreedomPop is staying mum on a lot of issues, including how many employees it has, its list of investors beyond Zennstrom, and many of the details about its service and partners.
In addition to Clearwire, Miller said FreedomPop has a deal with another major carrier, though he declined to name that company. FreedomPop also once had a deal with LightSquared, the company whose plans to build a 4G wholesale service stalled amid concerns about GPS interference.
Despite its apparent failing, LightSquared managed to push the industry toward lower wholesale prices, something that paved the way for FreedomPop to offer its service.
“Just 12 months ago, our model didn’t work,” he said.
Whether or not FreedomPop ever makes a penny, its business model is likely to put pressure on the existing wireless carriers, who have been trying to find ways to increase prices and add new limits in an effort to pay for expensive upgrades to 4G networks.
Skype, Miller said, was originally designed be part of a bigger free broadband service, but the calling program itself proved to be so popular that the company ended up focusing on that. Zennstrom and his team later sold Skype to eBay, and he then joined a group that reacquired the firm, before again selling the company last year to Microsoft.
As for when to expect FreedomPop to begin its service, the company is only committing to “sometime this year.” I’m hearing it could be early in the third quarter.