A “free” mobile phone service which self styles as the “Ryanair of the mobile market” is to launch in the UK for the first time in what could result in a major shake up of the industry.
US-based Freedom Pop supplies sim-only deals for free, with a basic level of minutes and data, meaning low-level users could stop paying for calls and texts altogether - while it also offers free international calls to 60 countries.
The move will put pressure on the existing mobile phone players - who are already in close competition for the best deals - to lower costs. FreedomPop has signed a deal in the UK with existing operator Three and an as yet unnamed second network and will switch users between the two, depending on which offers the best mobile signal.
The firm, which is backed by Skype founder Niklas Zennstrom, makes money by upselling users on other services such as extra data or voice or texts, or voice mail.
Chief executive Stephen Stokols said: “Basic users will have free access but those who want more will have to pay for the extra service. “It’s like easyJet and Ryanair, which charges basic fees on seats but you pay for baggage and extras.”
The free deal includes 200 minutes of talktime, 200 texts and 200MB of data a month, while customers also get free international calling to over 60 countries and free unlimited calls to other FreedomPop members.
Rob Kerr, mobiles expert at uSwitch.com, said: “A free SIM with a free allowance of minutes, texts and data might sound too good to be true, but it could just be enough to appease the truly entry-level customers.
“The more data-hungry users should be careful about out-of-bundle charges and make sure they do their research before they go over their allowance.”
A recent campaign from consumer group Which? found that many mobile phone users are continuing to pay for handsets which are already paid off - through rip-off contracts which tie customers into a fixed monthly payment for the duration of their contract. However, most deals include both the cost of buying the device and separate fees for calls, texts and access to the web - which means that many customers pay off the cost of their phone well before the contract comes to an end.