MVNO FreedomPop Spain has informed its customers that anyone who has not yet acquired a new SIM card, at a cost of €4.99 (US $5.96), to migrate to its new 4G/LTE service will be disconnected from its existing 3G service on 1 September. FreedomPop’s decision comes after it partnered with Spanish telecom group MásMóvil to offer its customers 4G services over the network of Yoigo, MásMóvil’s MNO brand. Users have the choice to port their numbers over to the new 4G platform via the new SIM, or to any other operator’s network.

FreedomPop, a U.S.-based MVNO, launched service in Spain a year ago, offering—for the first time in Spain—a free-of-charge plan that included 100 minutes of calls per month, 300 SMS, 200 MB of data and unlimited access to WhatsApp. The new basic plan is still free, but it no longer comes with data-free WhatsApp use or international roaming. The offerings of the company’s four other so-called premium plans start from 1.5 GB of data, 500 SMS and 200 minutes of calls for €4.99 (US $5.96) per month and range up to 10 GB of data and unlimited calls and SMS for €28.99 (US $34.63) per month.

Tarifica’s Take

This move on FreedomPop’s part represents a maturation process in Spain, a developed yet relatively budget-conscious European market that has seen an upsurge in MVNO entries. FreedomPop’s move to Spain in 2016 evidently came at an opportune time, and the MVNO itself has matured to the point where it was appropriate to make the transition to 4G/LTE.

The high-speed service is now the worldwide standard wherever mobile data is needed, and for even an aggressively budget-oriented MVNO to end 3G is a strong indication that the legacy service’s days are numbered in developed economies. And with the rise in popularity—and necessity—of data-hungry apps and services, customers have greater incentive than ever before to migrate to 4G.

So in doing a deal with Yoigo to get access to a 4G network, FreedomPop is offering higher quality while remaining true to its roots as a disruptive force in the marketplace by still offering free service. However, the difference now is that with the free basic plan, unlimited WhatsApp and international roaming are withdrawn, which leaves the customer who uses these services with the choice of either reducing data use or moving up to a paid plan. This is generally the end game with offerings of free services in any case, with operators hoping that customers who have become accustomed to using a certain level of services at low or no cost will become habituated to doing so and then after a while will be willing to pay for them. In addition, FreedomPop is making the reasonable assumption that its slate of non-free offerings with much larger amounts of data will be palatable to Spanish prepaid consumers at least in part because of the fact that they are being delivered over 4G/LTE.