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The Value Of Free, Is It Really Free Phones, And Free Service?

The Value Of Free

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What value can you assign to “Free?”  This debate has been going on for years and has now found its way into the wireless connectivity world.  The old adage that “if something seems too good to be true, it probably is” has steered most intelligent people away from getting something from nothing.  Even if you are the recipient of a potential windfall of millions of dollars from an African Prince, you still must provide your personal information and a $500-$750 handling charge before you get your millions.  

Buy One Get One Free?  I normally pay $3.49 for a pack of English muffins.  Every now and then my local market runs a Buy One Get One Free on these muffins and the cost for the package I’m paying for has increased to $4.29; okay, two packages at $2.15 each is still better than one at $3.49 but was the second one really “free?”

Let’s bring this closer to home.  How many of you currently have a “free” iPhone or Galaxy that you got after seeing the carrier’s advertisement of a FREE PHONE or “Get the Newest iPhone on us?”  What is really free here?  The small print clearly states that you are now locked into a 24 to 36-month agreement at (for example) $45 per month.  Here is how it works……… yes, you get billed $45 per month and this is offset by a $45 credit on your bill.  As long as you stay an active customer of your carrier, you could say that the phone is free.  If you cancel service or decide to port out to another service provider, the “unpaid” balance is due immediately and you won’t be able to change your service until it is paid.  If you finance your “free” phone and leave early, the charges may be even more.

ARE YOU WILLING TO PAY FOR “FREE?”

How much are you willing to pay to have a free phone?  That’s an interesting question that I put forth to a couple of my friends in the industry.  First, serial entrepreneur Leigh Hunt who created Freemo, Beast Mobile, Flex and is now teasing Dope Mobile.  His tag line is “Buy a Phone, Get FREE Phone Service” and he goes on to explain that “BIG Companies are making BILLIONS off the DATA you share with them when you use your phone.  Well, we are going to pay you for your DATA and provide you FREE cellphone service.”  

Beast Mobile is currently offering unlimited talk, text and 2 GB of data on their 4G, LTE service for free when you purchase a new NUU X6 mobile phone (extra GBs of data can be purchased at $8.00 per GB).  The trade-off to free service is monetizing ads or your individual activity on your handset.  Let’s dig a little deeper.

Every time you use the search bar on your phone (Bing or Yahoo), Beast Mobile is compensated by the search engine.  Also, advertisements appear when you check the weather, again, revenue to Beast Mobile.  Finally, the handset has a few apps that appear, but they are not pre-installed.  By clicking on them and installing them, more revenue to Beast, along with pre-installed apps like TikTok or a crypto that when you access them, a little more revenue.  Is this really an inconvenience for free monthly service?  In most cases, probably not and the younger users amongst us probably welcome the ease of operation and tradeoff for free data.

Leigh also hints at a higher initial bucket of data (from the current 2 GB) and an expansion to additional Android phones. (BeastMobile.net)

Let’s Reward Your Customers!

I also reached out to Chad el-Hage, Founder and CEO of GCOW® A B2B2C Digital Gift Cards & Real-Time Payments Solutions Provider who offers Rewards Payments as a Service. Chad created the TopUp Rewardz platform and states, 

“our goal is to bring ad-based free mobile service to the masses, while also creating value and generating new revenue streams for mobile operators, thru our unique rewards monetization platform.”

“Our rewards platform enables mobile phone users to top-up or reduce their phone bill by engaging with our app. Our win-win model creates value for everyone.” (https://www.topuprewardz.com/)

Chad’s company goal is to bring the user an ad-based free mobile service.  By engaging with their app and redeeming points, you can get top-up credits, data credits, digital gift cards, or even a free mobile plan. Again, a small price to pay for a free service.

One feature-rich differentiator that TopUP Rewardz offers is that in addition to the mobile user earning points, etc., there is a robust dealer program for any carrier or MVNO that wants to engage their dealers with TopUP Rewardz, so the “free” can be spread around where it can really have an impact……. on the sales floor!

So, is FREE Really Worth It?

Caveat emptor…… Latin for "Let the buyer beware!" Is free really free?  Just like “unlimited data is not really unlimited” (or “unreasonable” as our good friend Joshua Gordon from Red Pocket Mobile coined a few years ago), make sure you read the fine print.  While there are philanthropic and government organizations that really offer free goods and services (look no further than Lifeline or other current broadband programs like the Affordable Connectivity Program), most free offers come with a hitch.  But some consumers are willing to watch an ad or download an app to get a free or reduced cellphone bill.  

Atrium Unlimited Consulting has worked with both of these companies in the past and both are looking to expand their reach.  Are free service and rewards something that you, the carriers, and MVNOs should profitably be offering? Give us a call and let’s see if programs like these can work for you! (AtriumUnlimited.com )

Until then, Good Selling!

Jon



Jon Horovitz
Jon Horovitz has been in the wireless industry as a senior executive for 31+ years. He headed up sales and operations in leadership roles for McCaw Communications, AT&T Wireless, Nextel, Boost Mobile, and Sprint. He has owned an MVNO as well as assisted in the start-up of three others. His consulting company, Atrium Unlimited, LLC advises carriers, MVNOs, investment bankers, and venture capitalists interested in joining the wireless space. Jon would love to hear from you about any consultative needs you may have. Please visit https://AtriumUnlimited.com



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