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Sprint may purchase wireless startup FreedomPop

Sprint is in talks to possibly purchase or invest in FreedomPop.
By
November 12, 2014
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USAToday is reporting that Sprint is in talks to possibly purchase or invest in FreedomPop, a Los Angeles-based wireless startup. If Sprint were to purchase FreedomPop, it will likely cost them between $250 million and $450 million.

Although the talks are deemed as “fluid,” Sprint reportedly is bidding against an unknown large U.S. technology company and a smaller wireless carrier. If Sprint were to purchase FreedomPop, it would mark Sprint’s first acquisition since their failed pursuit of T-Mobile over the summer.

Since Sprint’s new CEO Marcelo Claure took over for former CEO Dan Hesse early this year, Claure has made it a mission to remake the company’s growth and investment strategy. Meaning, Sprint will try to follow T-Mobile’s strategy under John Legere.

Considering Sprint is still on track to lose 2 million of its customers this year, it isn’t hard to see why he would be desperate for changes. But Claure has made a number of price changes that have made their company more attractive to consumers and raised Sprint’s year-over-year revenue growth of 9.5%.

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FreedomPop offers free 4G mobile broadband Internet access through Sprint’s LTE network, 4G WiMax and 3G CDMA networks. As GigaOM described, “FreedomPop users tend to be both budget-minded and tech-savvy, willing to exchange big expensive mobile data buckets for FreedomPop’s limited but free data allotments and the reliability of 2G voice calling for FreedomPop’s free or cheap VoIP services.”

FreedomPop acquires 95% of its subscribers online and also converts 50% of consumers who try its free service into paying customers, according to USAToday. FreedomPop has also unveiled their newest move which provides customers with 100 hours of free international calling, with no global roaming fees, to more than 30 countries.