As Sprint and Clearwire get closer, FreedomPop has a smile on its face
If Sprint's $2.2 billion bid for Clearwire passes through the FTC, the third-place US carrier will find itself with a higher investment in WiMax, a pre-LTE technology that Sprint uses to power its "4G" network. Sprint has previously announced that it is building an LTE network to rival AT&T and Verizon, so it wouldn't be a surprise if the company decided to trash WiMax and repurpose Clearwire's spectrum for a faster "true 4G" network.
That would leave FreedomPop in a bit of a bind. The company, like Karma, uses Clearwire's WiMax network to power its "freemium" connectivity devices. Essentially, users are offered 500 megabytes – 1 gigabyte with the Hub Burst, a home solution we'll come back to later – of connectivity for free, and are prompted to purchase more access if they reach their maximum.
According to FreedomPop CEO Stephen Stokols, however, FreedomPop should be just fine. He says that Sprint plans to keep both its and Clearwire's WiMax networks running through 2015, offering FreedomPop plenty of time to switch its hardware over to LTE. This was apparently the plan all along, as Stokols says that FreedomPop is currently in "beta" and was planning on moving to LTE once it had proven that the freemium model could work.
If anything, FreedomPop will be in a better place once Clearwire is absorbed into Sprint. Stokols says that the deal "is actually something [FreedomPop has] been counting on," as it reduces some economic and technological anxieties stemming from Clearwire's rocky future and having to support both Sprint and Clearwire's networks.
The deal will make iterating on the company's products, a WiMax-enabled iPhone and iPod sleeve and the Hub Burst, a home router, easier for the company. The Hub Burst, which became available for pre-order in December, will be shipping next month, and FreedomPop has told customers that it will swap their WiMax-enabled devices for LTE-equipped versions as they become available.
So, to hear Stokols tell it, the Clearwire acquisition will be good for FreedomPop. The company was previously operating under the fear of Clearwire's financial troubles, made all the more poignant by its experience with LightSquared. For those who have already forgotten LightSquared, the company, like Clearwire, sells 4G connections (though LightSquared supports LTE) but ran into a few regulatory snafus when it came out that the spectrum it was using interfered with GPS.
The transition from LightSquared to Clearwire was unplanned and difficult for FreedomPop. With the "jump" from Clearwire to Sprint, however, the company says that it's prepared to make the switch, and that it will be in a better place than it is now. We'll have to see if that actually comes to pass.