The company that runs FreedomPop, STS Media, announced today that it has agreed to sell the FreedomPop brand to Red Pocket Mobile. Terms of the deal have not been disclosed, but a Reuters source familiar with the deal says the transaction value is in the "high eight figures." STS Media also controls Unreal Mobile. It is not known if Unreal Mobile was also sold in the transaction. BestMVNO has reached out to Red Pocket Mobile's PR team for further clarification. (Update: Unreal Mobile was also acquired as part of the transaction.)
STS Media says that proceeds from the sale will be used to further invest in the technology that the company had been using to power FreedomPop. Stephen Stokols, the Chief Executive at STS, says that the move will put STS in a better position to partner with other companies or private equity groups to allow it to aggressively pursue the purchase of Boost Mobile.
STS has said that it is speaking with several private equity groups and at least one "facilities-based buyer," on a partnership to buy Boost. Stokols declined to name potential partners. A "facilities-based buyer" refers to a company that owns an actual wireless network, such as US Cellular, Verizon and AT&T.
Boost Mobile has been in the news a lot over the last several weeks. Sprint recently agreed to sell off the prepaid brand if its merger with T-Mobile gets approved. There are currently several known suitors of the brand, including its original founder, Peter Adderton, and Lifeline provider Q Link Wireless. Amazon has also been mentioned as being interested in purchasing Boost Mobile outright or purchasing any wireless spectrum that may be divested as part of the merger.
Red Pocket Mobile and FreedomPop both compete in the low cost MVNO market. Both providers sell a multitude of plans including pay by the month, multi-month and annual plan options. FreedomPop is estimated to have between 1 million and 2 million subscribers. A FreedomPop blog post in 2016 said that the company added more than 1 million subscribers since its initial launch. An article in the LA Times in 2017 featuring quotes from Stephen Stokols had the count at 2 million.
Typically when an MVNO's subscriber base gets sold off to another provider the transaction details are unknown. However, when TPO Mobile was sold off last year to Ting, TPO Mobile's subscriber base was acquired at a cost of $75/subscriber. TPO Mobile is a publicly traded company in the UK and made the figure known in a proposal to its shareholders.
FreedomPop differed from TPO Mobile in that FreedomPop featured free plans and sold cheaper service in general. It would be surprising if FreedomPop's subscriber base also went for $75/subscriber. However, 1 million customers at a value of $75/subscriber would certainly be in line with the Reuters source that identified the value of the transaction between FreedomPop and Red Pocket Mobile as in the "high eight figures." BestMVNO estimates that FreedomPop was sold to Red Pocket Mobile at a valuation of $37.50 - $75 per subscriber.
Update 6/7/2019
Ting disclosed in a tweet that it also acquired a part of FreedomPop.
On the contrary, we picked up a selection of FreedomPop CDMA customers: https://t.co/ZOczdbJD2m
We're excited! Details are forthcoming about a special FP CDMA rate plan which will be communicated to FP CDMA customers soon. We will not be adopting the Freemium model.
— Ting (@tingFTW) June 7, 2019
According to an SEC filing linked to from Ting's tweet, Tucows Inc, the company that owns Ting purchased FreedomPop's CDMA (Sprint) customers on May 31st, 2019. Tucows also purchased CDMA customers from STS Media's other brand, Unreal Mobile. In total, 150,000 customers were purchased by Tucows, and of that number, 100,000 were subscribed to a free plan on FreedomPop. The SEC filing says that Tucows Inc will pay up to $3.6 million for the subscribers. That amounts to up to $24 per subscriber. The total purchase price will likely depend on how many customers decide to stick with Ting and how many convert from FreedomPop's free plan over to Ting.
Both Unreal Mobile and FreedomPop operated on the AT&T and Sprint networks. With Ting's SEC filing it seems likely that Red Pocket Mobile also purchased Unreal Mobile customers and only purchased those that had service on the AT&T network. Red Pocket Mobile also only picked up FreedomPop's AT&T based customers.
In 2015 FreedomPop launched services in the UK. By mid 2016 the company said it had a UK subscriber count at "six figures." The FreedomPop UK website is still currently up and running. It's not known at this time if any of FreedomPop's foreign wireless properties have been sold.
I knew it was too good to be true, I got an email from Unreal Mobile (my current cellphone service), saying they SOLD THEIR BUSINESS to Ting Mobile! And I would have to sign up with them, but in 2020 I will have to pay Tings rates! No more Unlimited everything for $10 a month! What a bait and switch this has turned out to be!
I used Ting earlier in the year but it costs too much for my measly budget, so I dumped them….
There should be a law against this kind of thing Unreal Mobile pulled! Im sure they had this planned out when they ran the Memorial Day special. Reel in a bunch of customers with a super low monthly rate and then sell your company to a competitor with Higher rates! What a ripoff! Im sure Unreal Mobile made a killing from this deal…
Only Unreal Mobile’s Sprint customers were sold to Ting. AT&T based customers were not. Unreal Mobile has offered the same rates and specials since they came out. Those same rates and specials are still available now and will continue to be moving forward. Unreal Mobile service on the Sprint network is supposed to be made available again, as well as on the T-Mobile and Verizon networks.
I have sprint through unreal mobile, the email they sent me yesterday, states that I must sign up now, with Ting and my phone was automatically migrated over to Ting’s sprint carrier, However, when 2020 arrives, I will be charged Tings current rates. So that $10 deal for unlimited everything, that I have now thru unreal mobile, will no longer exist. I knew it was too good to be true, so to speak…
Yes, the $10 deal will still exist. It exists now and will continue to exist on the AT&T side of Unreal Mobile (assuming you mean unlimited everything with first 1GB data at high speed). Red Pocket bought the Unreal Mobile brand name but not its Sprint customers. The Sprint customers, like yourself, were sold to Ting. However, Red Pocket will likely once again offer Sprint plans through Unreal Mobile. You can read about this further here
Unreal Mobile under Red Pocket FAQs.
“We’re planning no major changes to any existing plan.”
“……..and soon service on more major networks!”
Ting purchased FreedomPop’s CDMA customers:
https://www.sec.gov/Archives/edgar/data/909494/000143774919011556/tcx20190531_8k.htm
Red Pocket purchased the non-CDMA customers.