Updated. FreedomPop, a soon-to-launch mobile virtual network operator (MVNO) focusing solely on data, reached an agreement with Sprint to resell its 3G and 4G data access. The deal will allow FreedomPop to trade up on its agreement with Clearwire, exchanging its limited 72-market WiMAX footprint for Sprint’s eventual near-nationwide LTE coverage.
VP of marketing Tony Miller said that FreedomPop still plans to launch late this summer or in early fall with Clearwire-powered WiMAX modems and its even more anticipated WiMAX sleeve, which fits over the iPhone 4 and 4S. “We’re going to launch with Clearwire, but we’ll be live with Sprint by the end of the year,” Miller said.
At that point FreedomPop plans to offer tri-mode WiMAX-LTE-CDMA modems and sleeves, but as Sprint’s LTE network nears completion in 2013, it will begin phasing out WiMAX radios and rely solely on its Sprint network. Miller said FreedomPop may revisit the Clearwire deal in 2013 if the carrier can launch its own LTE network as planned, but even then Clearwire has only committed to the same limited LTE footprint it currently covers with WiMAX.
What’s astonishing is that Sprint is throwing the gates of its LTE network wide open to wholesale partners shortly after it launches next week. Typically, operators keep their latest and greatest technologies for themselves – it took years before most carriers started offering MVNOs access to their 3G networks. But according to Miller, Sprint isn’t just being liberal with its network, it’s also being flexible in its pricing policies.
To say FreedomPop’s business model is odd is an understatement. It plans to give away 500 MB to every customer each month, and then allow customers to trade those megabytes like digital currency. Social networking features and value-added services like VoIP will provide additional revenue streams (as well as a means for customers to earn more free megabytes), but only customers that subscribe to premium data plans or exceed their free monthly allotments will actually pay for the data they consume.
That kind of business model, however, doesn’t fit with the ways most carriers sell wholesale. Usually, carriers charge per-device connection fees as well as for data consumed. Sprint is making an exception for FreedomPop (as Clearwire did before it) to charge only for the gross data tonnage FreedomPop uses, Miller said, which allows the MVNO to easily move megabytes between customers.
As I wrote last month, we’re seeing a renaissance of MVNOs in the U.S. Sprint is becoming a big destination for MVNOs because of its flexible policies, and recently many other operators have begun following its lead. In the last year, both T-Mobile and AT&T have become much more welcoming of MVNOs.
Sprint, though, appears to be countering its competitors’ new openness to wholesale models with an even more aggressive stance. In addition to FreedomPop, Sprint is making LTE immediately available to Ting. It’s unlikely any of the remaining big 4 will be so willing to share their brand new 4G networks with partners so quickly.
“At Sprint we believe that our wholesale customers’ success is our success,” Sprint President of global wholesale and emerging solutions Matt Carter said in a statement. “We deliver a suite of innovative solutions that are customizable to the needs of each company and we are thrilled to enable new and innovative business models.”
FreedomPop isn’t just expanding its national reach, it may also be bulking up its bank account. Venture Beat is reporting that FreedomPop has raised $7.5 million in its first round of funding. We’re checking with the company on the details and will update this post when we learn more.
Update: FreedomPop’s Miller confirmed to us that the MVNO has in fact raised $7.5 million in first round funding, led by ManGrove and DCM, who join FreedomPop’s initial investor Atomico. Skype co-founder and Atomico CEO Niklas Zennström is spearheading FreedomPop, which is one of the reasons the MVNO has garnered so much attention even though it’s still months away from launch.
LTE image courtesy of Shutterstock user Inq