Ina Fried

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FreedomPop Makes Its Move Into the Phone Business With Free and Low-Cost Options

After a year of providing free and low-cost hotspot service, FreedomPop is moving into the cellphone business.

It is offering low-cost and free plans, though for now its only phone model is a refurbished version of the two-year-old WiMax-based HTC Evo Design. But those willing to put up with an older Android phone can save a bundle on service.

Customers can get 200 minutes, 500 texts and 500 megabytes of data each month for free, with unlimited texting and calling available for $10.99 a month.

“That’s how we are going to shake up Verizon and AT&T,” CEO Stephen Stokols said in an interview. “We do want to have a material impact on the market dynamic.”

FreedomPop is a tiny bit behind schedule, having said in June that it expected to have cellphone service up and running by summer. Stokols said that the company has more than 100,000 customers for its mobile data service, and that initial phone customers should have their devices in about a week.

Over time, Stokols said, the company wants to have a range of phones at different prices, including LTE phones, though it plans to always carry an entry-level smartphone for $99. It also hopes to let customers bring their own Sprint-compatible devices.

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There’s a lot of attention and PR around Marissa, but their product lineup just kind of blows.

— Om Malik on Bloomberg TV, talking about Yahoo, the September issue of Vogue Magazine, and our overdependence on Google