LOS ANGELES _ There are times when FreedomPop founder Stephen Stokols would get better coverage or service using a competing cellular carrier. Like when he got booted from his own provider after getting tripped up by confusing settings.
But Stokols _ along with his 2 million customers _ has been willing to suffer occasional headaches in exchange for an unbeatable deal. Half the people using FreedomPop pay nothing for cellphone service, including mobile internet access.
There are limits on monthly usage (500 megabytes in the U.S.) and caps on calling and texting (three hours and 500 messages). Finding a shop, reaching a customer service agent or buying a phone from FreedomPop can be complicated. And users need a credit card.
Stokols contends, though, that many should find the trade-offs attractive because he pegs median mobile data usage in the U.S. at about 700 megabytes per month.
Customers can pay a few dollars to pick up extra data, up to about $20 a month for unlimited data, calling and texting. Not a bad deal compared with $40 most elsewhere.
FreedomPop can afford to slash prices thanks to its departures from industry conventions, including accepting lower profit margins.
The Los Angeles company says its emergence over the last six years has led to imitation from T-Mobile, a near-acquisition for as much as $450 million by Sprint and price cuts at Verizon and AT&T. And all that has come while serving just a fraction of the 18 percent of U.S. cellphone subscribers not tied to a Big Four carrier, according to market researcher Besen Group.
Outside the U.S., FreedomPop is licensing technology in Italy and Mexico and gaining users in Spain and the United Kingdom. It's targeting 100 million users worldwide by 2020, some through partners that collectively have 500 million subscribers.
"Touching 20 percent of them is not unrealistic," Stokols says.
But he must decide how far to see through his vision to give away more and more data. The company is reviewing a previously undisclosed acquisition offer, but discussions are continuing about potentially going public next year.
FreedomPop has raised $109 million in venture capital, and the company could become self-reliant soon if, as expected, it generates profit for the first time this winter. Stokols declined to provide specific financial figures.
"We want to get to where communications is a free utility everywhere," Stokols said. "If you have internet, you're at an instant advantage."
