FreedomPop is adding Sprint's soon-to-be-launched LTE network to its free wireless service and reportedly plans to phase out its use of Clearwire's WiMAX network.
The Thursday announcement marks the second time FreedomPop has changed its strategy since hiring LightSquared last year to provide it with mobile broadband connectivity for its service, which it plans to offer at no charge to customers.
The agreement with Sprint will eventually provide the MVNO with a broader footprint than it will get through Clearwire.
"We were impressed with Sprint's network evolution strategy and are excited at the prospect of offering our users faster speeds and greater coverage," FreedomPop COO Steven Sesar said in a statement. "Our relationship with Sprint will enable FreedomPop to compete directly with Verizon and AT&T, anytime, virtually anywhere and in any market."
Sprint's LTE network, set for its formal debut on Sunday, is expected to cover 250 million people by the end of next year. FreedomPop will also be able to access Sprint's 3G network. By comparison, Clearwire's WiMAX network covers about 130 million people in 70 markets, and the company has no plans to significantly increase its footprint as it prepares to overlay the service with LTE.
FreedomPop signed on with Clearwire in February after it became clear that LightSquared, its first choice for wholesale mobile broadband service, would not be able to move forward with its LTE plans. The agreement with Clearwire wasn't exclusive, allowing the company to re-hire LightSquared or forge a contract with a separate provider, FreedomPop marketing executive Tony Miller told Wireless Week at the time.
The new arrangement with Sprint will allow FreedomPop to offer tri-mode devices that use Sprint’s 3G and LTE networks, as well as Clearwire's WiMAX service, Miller said in an interview with GigaOm. It plans stop using Clearwire's WiMAX service as Sprint finishes deploying its LTE network, but may consider incorporating Clearwire's planned LTE network, Miller told the publication.
The loss of even a single wholesale WiMAX customer can't be good news for Clearwire. The company is working to shore up its wholesale customers as it braces for the loss of its largest account, Sprint, whose use of Clearwire's WiMAX service comprises a considerable portion of its revenue.
Clearwire has landed a few wholesale customers for its WiMAX network since the beginning of the year, but none the size of Sprint. However, Sprint and Leap Wireless International have signed on to buy capacity on Clearwire's still-unbuilt LTE service, designed to provide supplemental capacity in high-traffic areas.
FreedomPop plans to operate a highly unusual business model. It will sell USB modems and iPhone sleeves that come with 500 MB of free broadband service every month. Users can get up to 1 GB of free service by referring friends, and can buy additional capacity for $10 per gigabyte. Its iPhone sleeve sells for about $100 and is currently up for preorder.
The startup is backed by Skype co-founder Niklas Zennstrom and his venture capital firm Atomico.