Home » NetZero » Recent Articles:

FreedomPop Threatens to Tear Up Wireless Data Business Model With Free GB of 4G

“Disruptive” is perhaps too timid a word to use for Skype co-founder Niklas Zennstrom, the man who brought Excedrin-strength headaches to the music industry with file-swapping software Kazaa and streamed video across the net for free with Joost.  Now he wants to blow up America’s business model for expensive wireless data by literally giving it away to wireless phone users.

FreedomPop has a “freemium” business model of its very own — give away 1GB of 4G data through Clearwire to iPhone owners willing to use FreedomPop’s WiMAX-fitted phone case with the hope users will throw more business their way for around $10/GB after the first gigabyte is gone.

Zennstrom

Clearwire has been in the mood to make deals with all-comers to leverage its WiMAX network that carriers like Sprint plan to abandon for LTE 4G service in the not-too-distant future.  By giving away 1GB of free usage (and it remains unclear whether this is a “one-off” deal or if the meter resets to zero every month), the company is set to draw plenty of free press.

FreedomPop is likely to appeal to price-sensitive customers who don’t want to pay providers $30 a month for 2-3GB of usage when a much smaller, cheaper data plan combined with the free service will do.

The WiMAX case, which will fit over Apple’s iPhone, also acts as a mobile hotspot, supporting up to eight concurrently-connected devices.  No change of phone is required as users can connect to the service through Wi-Fi.

Customers will have to place a deposit on the case, likely less than $100, refundable when returned in good condition.

With most people not exceeding 1GB of usage per month, the only cost will be the “bare minimum” data plan customers are required to take with AT&T, Verizon Wireless, or Sprint, which currently runs $15-20 for a few hundred megabytes.

Clearwire’s WiMAX doesn’t deliver coverage to all points in the United States, and its speeds are considerably lower than 4G LTE service.  But free is free – a concept NetZero hopes to use to pitch a similar free 4G Clearwire WiMAX service.  The primary difference is your granted usage allowance.  FreedomPop will provide 1GB — NetZero 200MB.

http://www.phillipdampier.com/video/WSJ How Skype Co-Founder Hopes to Make Money Giving Away Mobile Broadband on FreedomPop 3-23-12.flv

The Wall Street Journal explores the business model of FreedomPop.  How can giving away 4G data succeed financially?  (4 minutes)

Share

NetZero’s “Free Wireless Internet Access” Comes With Catches

The days of free Internet access are back… sort of.

United Online, Inc. announced Monday that it will offer free wireless Internet access through its NetZero service, provided as a “loss leader” that depends on users upgrading to paid access to cover the service’s costs.

NetZero became familiar to most Americans in the 1990s when the company handed limited dial-up Internet access, paid for through online advertising that subscribers endured in return for getting the service for free.  But broadband costs considerably more, so as the transition away from dial-up turned into a stampede, NetZero faded into memories about as much as AOL signup floppy disks and CD’s.

But now the company is back pitching free access to “4G wireless Internet” with no strings attached, contract commitments, or overage fees.  But that does not tell the full story.

While there is no contract commitment, NetZero requires an upfront investment in wireless hardware — $50 for a USB antenna stick suitable for a laptop or $100 for a “mobile hotspot” that can deliver a Wi-Fi connection to other nearby devices.  The devices are for sale on NetZero’s website.

The “free wireless” offer is probably better described as dim sum — it comes with a 200MB monthly usage limit, which makes it suitable for basic web browsing and e-mail only.  Once your limit is reached, the service is cut off for the remainder of the month, unless you agree to one of several paid usage plans that range from $9.95 for 500MB to $49.95 for 4GB, billed monthly.

After 12 months, NetZero’s free ride is over unless you agree to continue with a paid usage plan.  It ends even sooner if you choose to upgrade to a paid plan anytime during the first year.  Once you do, you lose the option of switching back to the free plan.

Whether paid or not, NetZero users ride on Clear’s troubled 4G WiMAX network, which Sprint — Clear’s largest customer — is planning to eventually abandon for more advanced LTE.  The long term future of Clear, also known as Clearwire, is also up in the air.  The company has ceased investing in its WiMAX network and is making preparations of its own to switch to LTE 4G technology — incompatible with the NetZero hardware you will spend $50-100 to acquire.

Clear’s network has also received considerable criticism for its speed and performance.  Because it operates on much higher frequencies, Clear’s wireless signal has problems penetrating indoors, and has even more trouble where energy efficient window coatings are used, especially in the south.

While NetZero does, in fact, deliver the service for free, the upfront investment and potential service headaches limit its usefulness.  Light users may find free Wi-Fi, increasingly common in a number of businesses, more convenient, affordable, and faster than the NetZero alternative.

Share

Search This Site:

Contributions:

Recent Comments:

  • JoeinIllinois: At some point, won't the cable companies press ESPN , the Regional Sports Networks, NHL network, NBA network, MLB network, NBC Sports Net, regional NC...
  • Paul Houle: The big issue with Fiber is that it has high costs to set up, not so much because the hardware is expensive, but because you have to either dig up t...
  • Scott: Perfectly example of why I still don't subscribe to cable or satellite. The only channel I *might* watch out of that entire lineup is Comedy Central....
  • James Cieloha: CableOne, Service Electric, GCI, Buckeye and other NCTC members are being forced by Viacom to add the Epix movie channels in order to carry the cable ...
  • Dave Hancock: I don't know where AP lives, but in MOST areas of the country MOST people do not have any choice for High Speed Internet (15mbps or above) - it is the...
  • tacitus: That doesn't sound right. Are you in some sort of contract? Where in the country is this?...
  • AP: Good luck cutting cable if you live in an area that has one cable, internet, and phone company like I do. If you want internet or phone with the cable...
  • Dave Hancock: Soon the rest of the cable companies will follow Verizon's lead and start limiting the input bandwidth to their systems (ex: Netflix) to discourage su...
  • Milan in Austin: Cable TV is an obsolete product! I suggest everyone seriously consider dropping cable television. I cut the cord in August of 2013, and don't miss ca...
  • gsuburban: I have to agree that Verizon is not interested in providing its customers with a "clear pipe" due to the politics of peer-to-peer data sharing or what...
  • Scott: Not good, that takes away all your leverage in the situation. If you're holding the money you can work through the BBB or try and negotiate with the ...
  • Hudson Mohawk Press: We knew it couldn't last forever. Starting this month Time Warner Cable of NYC is charging Earthlink Internet customers a $5.99 modem lease fee. The w...

Your Account: