Startup backed by Skype co-founder aims to undercut Mexican telcos
By Christine Murray
MEXICO CITY Oct 12 (Reuters) - A U.S. wireless startup backed by a co-founder of web phone service Skype has teamed up with Mexican pay-TV provider Dish Mexico to lure subscribers with free call and data plans in the country's growing and increasingly competitive mobile market.
FreedomPop, a five-year-old firm backed by Niklas Zennstrom, will take advantage of a sweeping telecoms reform that gave mobile virtual network operators (MVNOs) access to the network of billionaire Carlos Slim's America Movil at regulated prices.
MVNOs, like Virgin Mobile, which has just a 0.6 percent market share in Mexico, rent capacity from companies with existing mobile networks. L.A.-based FreedomPop, though, is seeking to sharply undercut them and the carriers, by giving about half its users a package of calls, texts and data for free.
"The business model part is really what differentiates us," co-founder Stephen Stokols said in a telephone interview, adding that the free plan would have a limit on data and was likely to be of interest to half or a little less of its overall customer base.
The company's other subscribers will pay for services such as extra data, microfinance loans, online security and the purchase of extra phone numbers.
MVNOs have historically struggled to gain ground in Mexico, with just 0.8 percent of Mexico's mobile subscriptions, according to the latest data from regulator the Federal Telecommunications Institute (IFT).
That compares to the United States, where the largest MVNO, TracFone, owned by billionaire Slim, has a hefty 25 million clients.
Despite Mexico's reform, Slim's telecoms giant still holds almost 70 percent of the market there. Continuación...