Skype co-founder Niklas Zennstrom knows disruption.
Skype was a tremendously disruptive product, leveraging peer-to-peer technology to carry voice, it continues to be an incredibly powerful force in the disruption of voice applications. Skype has changed the way people see voice apps in how it integrates persistent chat and messaging with video and other services. Skype had 663 million registered users as of EOY 2010, it’s likely even bigger than that now.
Think about it 663 million registered users in 2010–if you factor in some growth over the past few years, that makes Skype as big as the largest carrier in the world. China Mobile has 703.46 Million subscribers as of Nov 2012.
But now Zennstrom is working on something much bigger.
FreedomPop Home Broadband
Today, Zennstrom’s latest venture, FreedomPop said it’s now taking preorders for its FreedomPop Hub Burst modem which lets users access the Internet over high-speed wireless networks for free.
Users can already access the FreedomPop network for free using a USB stick, WiFi hub for 8 devices or a Sleeve for iPod Touch that effectively turns the Touch into an iPhone. These devices are effectively “free” but require a reimbursable security deposit of between $49 and $99 bucks.
The company noted that the device, available for an $89 deposit, will ship next month. If a user decides to turn off the service within the first year, he or she can return the modem to FreedomPop and receive the deposit back. There are no contracts involved with the Internet service overall.
The company offers free Internet access delivered via Clearwire’s WiMax network.
Here’s what FreedomPop CEO Stephen Stokols had to say on C|Net: Major broadband providers, including Time Warner Cable, AT&T, Verizon, and Comcast, are pillaging consumers, charging in excess of $500 per year for home Internet. FreedomPop’s early successes [have] validated consumers are looking for more convenient and affordable ways to consume data. We’ve already given away more than 15 million MBs of free data and are expanding our Beta to meet the increased demand this holiday season. The Hub Burst puts us in a position to offer a compelling alternative for the massive home market much quicker than we initially planned.
If you want to buy one, check your coverage
Check your coverage here before buying!
Customers don’t like this industry
Per these industry reviews it becomes clear that users are not satisfied with the service they are getting from existing broadband providers.
People seem to be super happy with Verizon FIOS Fiber Optics… but even the people who have that rate the price as 6.3 out of 10. Can you imagine an industry whose customer satisfaction/approval ratings hover at around 5 out of 10 (other than US Presidents I mean)?
This is an industry ripe for disruption.
If FreedomPop is successful proving out this model, they will be able to rapidly blow up the existing broadband Internet model. Customers will drop Comcast and other such services like a hot rock, improving their monthly bills by up to 80%. Remember, we are in hard economic times. If people can cut the cord and slash costs, they will do so, in droves.
Who will be hurt by this?
Here are the short list of providers in the US who will be impacted if this system takes off. These guys better be watching their backs.
AT&T / Yahoo
Cablevision
Charter
Comcast
Cox
EarthLink
Time Warner Cable
Verizon
The implications for the existing broadband providers could be apocalyptic.
What happens next?
Recall that “Home Broadband” is just one of the services provided by FreedomPop. FreedomPop users can also get mobile broadband also for “free” (1GB per month with security deposit for the device). With carriers increasingly shipping unlocked phones, we could see something very revolutionary happening to the carrier business. Carriers of broadband are looking over their shoulders, but “Voice Carriers” (aka Telcos) better watch their backs next.
This is going to get very very interesting.
Miko Matsumura is Senior Vice President of Platform Marketing & Developer Relations at Kii Corporation. Kii provides a Mobile Backend-as-a-Service (MBaaS) that serves the largest phone carriers and leading app makers on Android and iOS platforms. Kii Cloud serves over 25 million users and drives over $250M in industry revenues.
