U.S. cable operators have been using their growing WiFi networks as a free perk for their cable-modem subscribers, but a new WiFi-only play from FreedomPop could give those operators a new way to monetize their buildouts.
FreedomPop, a startup that initially sold “free” mobile voice and data services to cost-conscious customers, expanded into the WiFi-only world last week with a plan that sells for $5 per month.
Billed as an alternative to heavily capped Long-Term Evolution (LTE) cellular-data plans, FreedomPop’s platform allows customers to auto-connect to hotspots that are part of its aggregated network, enabling them to take advantage of a plan that offers unlimited voice, text and data.
REACHES 10M HOTSPOTS
FreedomPop’s WiFi network spans about 10 million hotspots so far, including an undisclosed number that have been deployed by cable operators. About 8 million of those hotspots are “premium,” meaning they are closed and require credentials before users are allowed to connect, Stephen Stokols, FreedomPop’s CEO, said.
FreedomPop’s new app for the WiFi offering will authenticate subscribers to those participating networks automatically. FreedomPop initially supports Android-based devices, but work is underway to extend it to Apple iPhones and iPads.
And FreedomPop has some sizable expansion plans. Stokols said he expects FreedomPop’s network of autoconnectable hotspots to jump to 30 million to 50 million hotspots within about six months.
“We’re trying to aggregate the aggregators,” he said. “We’re trying to transfer the value of these networks to the consumer directly.”
FreedomPop wouldn’t identify whose WiFi networks are being aggregated (Boingo’s WiFi networks are not currently among them). But Stokols acknowledged that the company’s current network includes hotspots that have been deployed by U.S. cable operators.
MSO members of the “Cable WiFi” roaming alliance — Comcast, Time Warner Cable, Cox Communications, Cablevision Systems and Bright House Networks — have deployed more than 300,000 hotspots in businesses and other indoor and outdoor public venues. Charter Communications has said it intends to join that group. Comcast and Cablevision Systems, meanwhile, have begun to introduce secondary SSID signals in millions of home-side gateways that are accessible by their respective broadband subscribers.
WIFI’S REVENUE POTENTIAL
Cable operators have so far downplayed the revenue-driving potential of their WiFi networks, using them mostly as a broadband-subscriber retention tool. However, it’s expected that MSOs will eventually tap into these wireless networks to implement so-called “WiFi-first” mobile voice services that use cellular as a fallback.
FreedomPop’s WiFi offering is targeting a completely different market. Stokols said prime, potential customers include consumers who want to wring value out of older Android phones that are no longer attached to a cellular service. He estimates about 200 million “abandoned” mobile phones fit that category.
Stokols also said the model would appeal to budget-conscious consumers or those who can’t afford cellular services; it could also be a way for FreedomPop to eventually attack the lucrative prepaid smartphone market.
Because FreedomPop’s WiFi product provides unlimited voice and data, the company said it expects to eat some margin on a small set of users who gobble up lots of data. Nonetheless, it believes the anticipated consumption patterns of most customers will make the business model work.