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FreedomPop wants to kill monthly mobile phone bills with cheap annual plans

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FreedomPop, the mobile virtual network operator (MVNO) that offers SIM cards with completely free basic mobile service plans, has announced what it is touting as the mobile industry’s first-ever annual plan.

The Los Angeles-based company is offering a reasonably generous 1,000 minutes, 1,000 texts, and 1GB of data per month, either via AT&T or Sprint’s LTE network, for $49 per year — the equivalent of around $4 per month.

Founded in 2012, FreedomPop has built its business by giving away small bundles of text messages, talk time, and mobile data, with the idea of “upselling” to those who need more. It was originally a U.S.-focused service, but FreedomPop has since gone international, starting with the U.K. in 2015 and a subsequent launch in Spain. The company has so far raised around $110 million in funding, with some notable backers on board, including Atomico, Mangrove, Intel Capital, and Partech Ventures.

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FreedomPop has also expanded into other verticals, recently launching its own-brand Android smartphone and opening its own online store for refurbished devices.

With the launch of its new annual plan, the company is returning to its roots by focusing on very cheap mobile plans, but it’s also looking to create synergies between these plans and its fledgling hardware business. Indeed, FreedomPop is now offering smartphones with plans included out of the box — it’s selling the LG Tribute for $79 and the Samsung Galaxy S5 for $149, both of which will come with the aforementioned annual mobile plan included for the first 12 months. In real terms, this means you can get your hands on a former Samsung flagship phone and plenty of minutes, texts, and data for the equivalent of $12.40 a month for the first year, then $4 per month thereafter, which is pretty good.

“We’re moving away from the idea that a mobile service has to come with a monthly bill,” said FreedomPop cofounder and COO Steven Sesar. “For a one time purchase of under $80, you can get a smartphone and service and not have to think about ongoing payments.”

In addition to its annual plan, FreedomPop is also offering two biannual plans. For $114, the equivalent of $19 per month over six months, you get unlimited minutes and texts, plus 5GB of data each month. And $78, or the equivalent of $13 per month, gets you unlimited minutes and texts, plus 2GB of data per month.

It’s clear that FreedomPop is launching an all-out charm offensive aimed at American mobile phone users. When you consider that the likes of Sprint and AT&T can easily charge up to $60 per month, the prospect of paying just $4 per month seems almost too good to be true. Granted, 1GB of data per month may not be enough for everyone, but for those who don’t stream Netflix or engage in other bandwidth-intensive activities, it will be more than adequate.

“Every month, Americans are paying a big chunk of their paychecks for wireless service,” added FreedomPop cofounder and CEO Stephen Stokols. “For one month’s bill, they can now get service for a year.”

For those who use a lot of data, $19 per month on a biannual plan for a fairly hefty 5GB of data will be enough to keep most happy.

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