Expensive in-home Internet service may soon be a thing of the past, at least if FreedomPop has anything to say about it.
The startup, backed by Skype co-founder Niklas Zennstrom, today said it's now taking preorders for its FreedomPop Hub Burst home modem that allows users to access the high-speed Internet for free.
The company noted that the device, available for an $89 deposit, will ship next month. If a user decides to turn off the service within the first year, he or she can return the modem to FreedomPop and receive the deposit back. There are no contracts involved with the Internet service overall.
FreedomPop is trying to change the broadband market like Skype has changed voice. The company offers free Internet access delivered via Clearwire's WiMax network, something that could pose a big threat to the traditional Internet service providers like Time Warner Cable.
Here's what FreedomPop CEO Stephen Stokols had to say:
Major broadband providers, including Time Warner Cable, AT&T, Verizon, and Comcast, are pillaging consumers, charging in excess of $500 per year for home Internet. FreedomPop's early successes [have] validated consumers are looking for more convenient and affordable ways to consume data. We've already given away more than 15 million MBs of free data and are expanding our Beta to meet the increased demand this holiday season. The Hub Burst puts us in position to offer a compelling alternative for the massive home market much quicker than we initially planned.
FreedomPop users receive a guaranteed minimum amount. In the case of the Home Burst modem, that's 1GB of free data a month, double the level of FreedomPop's current offering. Customers also can receive a higher monthly data allowance for free by referring friends to the service -- much like DropBox and other companies have done in the past. And heavy data users can also purchase plans that start at less than $10 a month.
FreedomPop noted its Internet speed is faster than typical DSL and is on par with most cable providers. Up to 10 devices can connect to the Home Burst via Wi-Fi or Ethernet, and the modem can be set up in minutes without need for an installation appointment, the company says.Unlike with traditional service providers, there are no contracts or hidden fees, the company said.
"The median American household uses under 5.5GB per month at home, yet spends over $50 for Internet service," Stokols said. "FreedomPop gives these users an opportunity to save hundreds of dollars per year at a fraction of the inconvenience, especially for more moderate Internet users."
Along with the Home Burst in-home modem, FreedomPop also offers a service for the iPod Touch that allows users to connect to the company's 4G network and make free calls via Skype or any other voice-over-IP application.
FreedomPop coverage is currently limited to the area covered by Clearwire's WiMax network, but the company plans to move to the Sprint LTE network next year, which will expand the availability of its service. It has said its overall plan is to give every American the chance to get online for free.
Though the base service is free, FreedomPop still needs to make money. The company likely plans to generate revenue from services, as well as from the premium user accounts. We've contacted the company for more information and will update this post when we know more.
FreedomPop was founded in 2011, and is backed by Mangrove Capital, DCM, and Skype Founder Niklas Zennstom's Atomico.
Update, 12:35 p.m. PT:Adds information about how FreedomPop intends to generate revenue.