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I don't know if there's really a trick, just a business model counting on the fact that people will go over their free allotment.

I have a FreedomPop Rocket Sleeve that I use with an iTouch, had it for about a year now. I've never paid for more than the free 500MB bandwidth since I only use it in the rare times I'm out of a Wifi zone. And I'm pretty conservative with my data usage.

But FreedomPop is claiming 50% margin on their bandwidth, so I guess there are a lot of people buying more data. They must feel confident that this will carry on with the phones.



FreedomPop primarily uses Clearwire's WiMax network.

Wholesale bandwidth is significantly cheaper on Clearwire than regular cell networks. (Clearwire gets an average revenue of $11 per user per month. Rumor is that their wholesale agreement with Sprint is roughly $1 per GB, or $10 per subscriber per month.)

If those numbers are true, then giving users 500mb free bandwidth might only cost FreedomPop as low as 50 cents per month per user.


That makes sense. Considering that the "deposit" on the modem was $99 and the BOM is probably 50% of that, the device itself probably paid for the first 3-4 years of service.

Ironically, I also have Clearwire data service at home and I'm paying $24/mo for the exact same data (except it's uncapped and I'm using about 30GB/month).




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