U.S. startup Freedom Pop has launched a free 4G data service whereby users pay a one-time fee of $99 for a device that attaches to the phone and provides 500 MB per month independent of any mobile plan. Extra data usage will be charged at the rate of $10 per month per gigabyte. The device picks up a 4G signal via Clearwire’s WiMAX network, but Freedom Pop has announced its intention to switch to Sprint’s LTE network early in 2013. The add-on device, which resembles an iPhone case, also functions as a Wi-Fi hotspot and does extra duty as a charger. It provides only data (voice calls and text messaging are not part of the service).
Whether or not Freedom Pop’s device lives up to all the company’s promises with respect to speed and coverage, we consider the offer noteworthy because of what it indicates about the future. If not with this development, then with others to come, mobile data will cease to be the exclusive property of operators who charge for it by the month. Consumers will soon have the ability to choose their own options at prices more advantageous to them. In fact, if they also use OTT services to make voice calls and send text messages, savvy users will be able to buy a smartphone and enjoy all its features and functionality without ever subscribing to anything other than the most basic, least expensive pre-paid voice plan.
While tech journalists are for the most part skeptical of Freedom Pop and doubt whether consumers will break their subscribing habits even if it is in their interest to do so, we believe the writing is on the wall. As we wrote last week, consumers across the board are frustrated by the size of their bills, and companies like Freedom Pop are looking for ways to enable them to circumvent the operators and lower their costs.
This type of device may not have a mega-impact in the marketplace, but nonetheless we consider it to be a significant development – even a sort of “canary in the telecom coal mine.” Whatever forms the cheap and innovative competition ends up taking, operators will not be able to “own” mobile data as they have up to this point. The contract subscription model itself may be on the way out.