Is "Breakage" the FreedomPop Revenue Model?

“Breakage” might be the biggest near-term revenue generator for “free” mobile broadband provider FreedomPop, which plans to give away 1 Gbytes worth of usage for customers who could pay $10 per gigabyte for usage above the first 1 Gbyte of usage.

There are a couple of salient “angles” here. First, there is the emphasis on “mobile broadband,” not voice. FreedomPop does not sell voice. Also, there is the “freemium” business model. Then there is the issue of the use mode, which some will find a bit kludgy.

FreedomPop works by wrapping a case around an iPhone 4 or iPhone 4S, containing a WiMAX radio so users can communicate with the Clearwire network, which is providing the access. The kludgy part of the deal is that users cannot use their voice functions when the case is on.

There are some people who will put up with quite a lot of hassle to use some app or service “for no incremental charge.” The issue is how many.

Apparently there also is a $75 deposit to use the case. One wonders how many cases will be returnable in usable condition, essentially making the case a $75 upfront investment. That wouldn’t be unusual, though. Dongles or other devices used to access mobile broadband can cost more than $100 to couple of hundred dollars.

What is important here is the potential level of success. Can FreedomPop create a viable business offering mobile broadband on a freemium basis? Will users accept some of the limitations? In addition to breakage, what other for-fee services or features will emerge?