California-based FreedomPop is an MVNO that offers plans running the gamut from 4GB of data for $34.99 per month all the way down to a basic plan that gives users 500MB of data along with limited minutes and texts for free. Their free plan may stand out, but according to CEO Stephen Stokols, they actually have a higher proportion of paid to free users than some bigger services like WhatsApp and Spotify. With the decent prices and value for their plans, it’s not hard to see why that is. They also use gathered data from users to serve up offers that bear the promise of things like free data. Naturally, in an advanced market like the UK, where they just landed last September, it’s easy to think that they may have a hard time. According to the CEO, however, that isn’t exactly the case.
While a number of new arrivals in the area, FreedomPop included, have yet to truly prove themselves, Stokols says that FreedomPop is poised to see its first net profit in the very near future. Considering the fact that this is an MVNO with operating costs like any other who offers a basic plan to consumers at no cost, that is quite an accomplishment. Their conversion rate – the percentage of free users who jump on board the paid service – is at a pretty favorable 48% in the UK. Combined with conversion rates elsewhere, it’s becoming clear that FreedomPop and others like it are able to compete with other MVNOs and even the major local carriers’ prepaid options on some level.
FreedomPop’s expansion plans won’t stop at the UK, of course. On the nose of what could be their first net profit and a possible deal with another U.S. carrier, and on the heels of a $109 million fundraising round, the underdog MVNO has the capital and flexibility to bring their free service just about anywhere they see a possible profit. For now, they’ve expanded into Spain, with future plans still unannounced at this time. Along with the rise of MVNOs like FreedomPop, big carriers are expected to see a shakeup from tech giants in the near future, whose developing networks, currently used to link their own data centers, could end up accessible to the public in the near future. One analyst, Dan Bieler with Forrester, put it nicely when he said that carriers can “shoot yourself in the foot today or be shot in the head.”