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Sprint, Two Other Companies Seeking to Acquire FreedomPop

According to a USA Today report, Sprint is in talks to either acquire or make a substantial investment in Sprint data-only MVNO FreedomPop. The report puts the value of FreedomPop at $250 to $450 million.

This isn't the first time FreedomPop has been mentioned as a possible acquisition target. Back in August, Bloomberg Businessweek reported that two mobile operators were seeking to acquire FreedomPop. One was a US based company, possibly Sprint, and the other an unnamed international carrier. At that time, Bloomberg estimated FreedomPop's selling price at over 100 million dollars. For the price to go from $100 million to as much as $450 million in just three months suggests there's quite a bidding war going on. Indeed the USA Today article claims that in addition to Sprint, a smaller mobile operator and a "large U.S. technology company" are also negotiating to buy FreedomPop.

This flurry of acquisition activity is all the more surprising given that FreedomPop's most popular plan is its free mobile phone service which includes 500MB of data, 200 VOIP minutes and 500 texts per month at no charge. FreedomPop, which claims to be profitable, makes its money on overage charges and by upselling customers to paid plans.

A nine figure acquisition price would represent a very nice return for FreedomPop backers which include Mangrove Capital and Skype Founder Niklas Zennstom's Atomico. They provided FreedomPop a total of $12 million in seed money. On the other, as a FreedomPop user, I'm worried that a buyout would likely mean the end of my free service.

Related:
Two Operators Are Interested In Acquiring FreedomPop For $100+ Million
A Major Carrier May Acquire Freemium MVNO FreedomPop
Prepaid Operator Profile: FreedomPop


10 comments:

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  1. I noticed that FreedomPop has raised their paid plan pricing for the Home internet service (using the Freedom Hub Burst router). For example, the highest tier that included 10 Gb of high speed data was $18.99. It is now $21.99. All the lower tiers have increased as well. Still not a bad deal for data, but quite a jump practically overnight. It certainly sounded better when I could tell people I was getting 10 Gb of data for under $20 per month (there were no taxes or extra fees added to the $18.99).

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  2. I got a deceptive advertisement from FreedomPop in email. It said it was free all over. but the fine print said it was really $19.99 a month. I hope Sprint/etc fires the crooks in advertising if they take over.

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    1. No it is not. It is free. The $19.99 is for extras that you do not have to buy. Just uncheck the box that says "in addition to the free basic service, give me a free trial one month of the $19.99 additional service that will continue until I cancel it." It is optional.

      If you do not uncheck it,is your problem but you can do so at any time later as well.

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    2. "If you do not uncheck it,is your problem ..."

      That's a scam alright. Dishonest and deceptive. Trick someone into paying. The same tactic C-Net uses when it tries to blanket your system with malware when you attempt to download something.

      I commend you for successfully navigating Freedom Pop's shady attempts to rip you off.

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    3. Every transaction everywhere is "buyer beware" these days. It's no different than purchasing a product and/or service from a brick and mortar establishment where the sales representative tells the buyer that unless they say "no" they'll also get an extended warranty or a higher tier of service. And yes, I do refus to buy products/services from companies where I don't like the sales pitch, even if I have to go out of my way to do business elsewhere.

      Thoroughly reading any and every screen while making a transaction and unchecking any box for something optional is the same as saying "no thank you" to the sales clerk. I have always read things like software terms of service, so reading the screens is no different.

      A major online retailer named after a South American river gives me a multiple-screen high-pressure pitch for their other products and services every single time I buy from them, which is rarely.

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    4. I've never gotten anything like that at Amazon, Brock. And I order a lot. A lot of ads, yes, but nothing that ever automatically adds stuff to my order (like the fraud that FreedomPop tries to commit)

      And I don't know you are coming from on the "Brick and mortar" claim, which like your Amazon claim, might not exist at all. I get TONS of heavy sales pitches on the extended warranty there, but NEVER the "you will get it unless you say no" situation.

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  3. I'd be very careful of anything that says FREE. I think the $21/Mo for 10GB/Mo would be great if you could get 4G LTE from Sprint here in Elizabeth City, NC as many times Time Warner is very unstable here. However last time I messed with the Sprint network we could only get 3G and in hertford, NC there is no coverage so its really just inside the Elizabeth City area for NE, NC.

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  4. it's = it is. You mean "its" every time you want a possessive.

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    1. I know that rule but it still trips me up from time to time. Thanks for pointing out the error.

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  5. I think the reason that Sprint is interested is not necessarily to adopt these plans, which it could do on its own, but really to avoid the risk of someone else buying FreedomPop and potentially taking all those Sprint wholesale subscribers to another carrier!

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