FreedomPop has long offered a free cell phone plan on the Sprint network that features 500 texts, 200 minutes and 500 MB of data each month. The company has used that free plan to turn potential customers into customers. Once subscribed, FreedomPop tries to up-sell features that are missing from the free plan to its customers as a way to generate revenue. Some of the missing features include the ability to place calls over a cellular network (calls are through VOiP), voicemail, MMS, tethering, and data rollover.
In early June, FreedomPop introduced a new wireless feature called "Speed Boost." Speed Boost appears to have been added as a new "feature" for the company to try and up-sell its subscribers on.
FreedomPop describes Speed Boost as a "value added service" priced at $4.99/month. With Speed Boost enabled, subscribers to FreedomPop's Sprint based service get access to much faster data speeds capable of up to 25 Mbps.
With the introduction of Speed Boost, FreedomPop is now advertising that its paid plan speeds are limited to 5 Mbps while its free plan speeds are limited to 3 Mbps. However, FreedomPop subscribers around the internet including Dennis Bournique from Prepaid Phone News are reporting that speeds on their free Sprint based plan are actually being limited to just 1 Mbps. Dennis said he previously got around 10 Mbps with the plan.
With speeds being reduced, it will be interesting to see how this impacts FreedomPop's bottom line and its Sprint network customer base. I could see this causing more subscribers of the free plan to upgrade to a paid service thereby generating more revenue for the company.
The speed limitation of just 1 Mbps is not however unique to the industry. Ultra Mobile allows its customers to limit their speeds to save on data if they so choose, with the option to slow them to as little as 1 Mbps as well. I have actually tested Ultra Mobile at 1 Mbps for an upcoming review, and found service to be mostly usable, although on rare occasion I had some issues with music streaming.
I suspect that those who do a lot of streaming, albeit video, gaming or music will be hit hard the most by this change to FreedomPop's free Sprint based plan. Those that just want to browse the web, or place calls and text messages shouldn't be impacted too much.
At the moment, FreedomPop's free GSM plan, which utilizes AT&T's network does not have this speed limitation in place. If FreedomPop's new Speed Boost option proves to be successful for its Sprint based business model, don't be surprised if it makes an appearance on the GSM plan.