Wireless Cell Phone Update
Tags: Wireless, Apple, Mobile, Smartphones, Technology

M&A will change the wireless industry and create changes and lower prices. Blackberry has changed its business model to exclude cellphones and market the software.

Do future deals include combining wireless and information companies together to boost profits and staying power? Software and wireless are natural synergies. The resulting benefits should include cell phone apps for the wireless customers resulting in cross-selling and free updates.

Will the UK lead the world in new wireless M&A models?

The Freedom Pop model starts with free and increases prices quickly to move this group into paying customers. Build a large group of customers that love you and move them into new plans using discounted older phone models. Will Sprint or Virgin Mobile offer this type of service in the USA? Ideas are flowing and business models are changing to enhance the idea that wireless is around to stay. The global business world has embraced the technology.

FreedomPop, the mobile carrier that gives away mobile, data and text services and upsells users on other services expanded its coverage outside of the U.S. The company is opening in the UK as a SIM-only service — meaning no phones, initially, just the cards that you put into a phone that you bring to the network.

The free service will cover 200 minutes of calls, 200 text and 200MB of data — or, in the words of co-founder and COO Stephen Stokols, the equivalent of what you might get in the most basic mobile phone plan in England.

The deal also includes a pretty heavy emphasis on free international calling to 60 countries — international services being a key part of how mobile devices are used in Europe, along with free services to other FreedomPop users, and an allowance to roll over data to subsequent months. FreedomPop is also launching Jetsetter, a free roaming data SIM launching later this year. Users receive 100MB of free high-speed data per month initially for use in the U.K., Spain and France and eventually expanding to 20+ countries.

FreedomPop has 1 million users in the U.S. Stokols confirms that the company is raising a large sum of money, either by way of a strategic investor taking a majority stake, or another VC-led round for a minority stake.

FreedomPop announced that it would expand business in the region to a deal with KPN Belgium, but no actual service. In the event, Stokols says that FreedomPop is turning to the UK and an MVNO partnership with Three (which recently acquired O2 from Telefonica) for its first commercial offering.

There is a second carrier likely to join the mix in the UK, and Stokols says that FreedomPop has also signed deals with six other carriers, covering nine countries, for further pending rollouts.

It’s an interesting move: the UK is one of the biggest, but also one of the most competitive and saturated markets in Europe. Stokols claims that presents even more of an opportunity for FreedomPop. “People here are used to switching all the time, and no one can compete with free.”

For those unfamiliar with FreedomPop, the company has developed a unique business that sets the startup apart from the average MVNO. Most “virtual” operators essentially buy minutes, messages and data in bulk from carriers for their services and then resell these to their customers, making a very thin (and often no, judging by the number of MVNO failures) margin in the process.

FreedomPop, on the other hand, essentially buys just data from carriers and then uses that for all of its services, be they voice (over VoIP) or otherwise. It also negotiates different usage tiers and pays for carrier’s data as used .

“We acquire customers in the U.S. for 1/100th of what the carriers pay,” he claims. He says that its customer acquisition costs are “under $5 where most carriers’ are $380/user.” Free doesn’t come free.

Consumer Cellular has better low usage plans for all models iPhone at affordable prices. They sell SIM cards for $10 and run free SIM card. Their business model includes allowing customers to use previously owned phones or purchase directly from their firm.

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