US-based MVNO FreedomPop raised in January USD 50 million to expand its services in Europe, Asia and South America. Last year it launched in its first markets outside the US, the UK. However, Europe is not at the top of the list for expansion, according to Nicholas Constantinopoulus, responsible for Europe at FreedomPop, in an interview with Telecompaper.
The company is in talks with European players, but he declined to say which. He confirmed an initial agreement was signed with Belgian operator Telenet, the new owner of Base. FreedomPop already announced a deal with Base in mid-2014 to launch in Belgium, but nothing has materialised since. Constantinopoulus said Belgium and the Netherlands, where Base's former parent company KPN is based, are expected to come up on the agenda "in a later stage".
However, the company first wants to target bigger markets, and the launch in smaller countries will occur in cluster fashion, he said. Furthermore, he noted that FreedomPop's investors are not as interested in low-ARPU countries, making Europe difficult for expansion. Countries where the use of credit cards is common, like the UK and US, are also more attractive, he said.
According to Constantinopoulus, the company is doing well in the US and UK. In its home market, it's converting almost 50 percent of customers to paid services, and in the UK, the rate is at 40 percent. In the US, the company is generating ARPU of around USD 15. The UK market is similar to the US, said Constantinopoulus, which is why the company launched there first. The free offer in the UK is 200 minutes, 200 SMS and 200 MB per month. The first 10,000 customers are offered the Premium 1GB package, which normally costs GBP 8.99 per month.
Constantinopoulus said the company is working heard on conversion and reached a tipping point in recent quarters. FreedomPop is aiming to turn profitable in the US this year, helped by its low operating costs. For example, in the UK, it has just one manager.
