SAN FRANCISCO (USA Today) -- Consumers are used to getting reduced prices on snazzy new smartphones - or paying next to nothing for older models - if they're willing to sign a long-term wireless contract.
But will they pay $99 for an older, refurbished smartphone if they can get basic voice, text and data service every month for free?
That's the question that a unit of Sprint wants to answer with a marketing experiment it hopes will eventually help it steal millions of customers from much larger rivals.
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The new service plan that Sprint will begin carrying over its wholesale network - and which will be sold online through a wireless upstart called FreedomPop - shows the lengths that the No. 3 mobile operator is willing to go to compete with AT&T and Verizon Wireless.
It comes as Sprint is struggling to keep pace in a maturing North American wireless market, where the big guys have captured most high-end smartphone users, while low-cost wholesalers have been siphoning off growing numbers of consumers via prepaid accounts.
How the free service became possible also demonstrates what a start-up entrepreneur sometimes has to do to attack a market dominated by huge incumbents.
In the case of FreedomPop CEO Stephen Stokols, that meant standing on the docks of Long Beach, Calif., bidding on shipping crates filled with second-generation smartphones bound for Asia.
"It was a bit like American Gangster," says Stokols, referring to the movie about notorious drug kingpin Frank Lucas. "We needed $400,000 in cash and a truck to carry it."
Stokols, a former vice president of strategy and product development at British Telecom, says his first foray nearly ended badly, when neither he nor the workers who accompanied him could fit their haul of used phones into anyone's car.
"I didn't realize we'd need such a big truck," Stokols says.
But after some perseverance - which included sitting on the darkened docks waiting for a truck to haul that first load - the company has now "locked up" about 140,000 HTC Evo handsets that cost it $68 each, he says.
The company then refurbished the devices so it could take advantage of the faster speeds of Sprint's wireless network, using a technology known as 4G LTE.
The start-up will now offer 500 Mb of data, 500 text messages and 200 so-called "anytime" voice minutes per month for free to its HTC Evo Design users - as long as they continue the service.
It will also offer unlimited voice and text service for $10.99 a month - a price that undercuts similar plans from AT&T, Verizon Wireless and T-Mobile by 80% or more.
FreedomPop users can also earn additional data capacity every month by getting other users to "friend" their accounts.
Users of these linked accounts can then trade data bandwidth with their friends, depending on their monthly usage needs.
"We think everyone should have access to a smartphone account," says Stokols, whose one-year-old company has already signed up 100,000 customers for its free Wi-Fi Internet service under the motto: "The Internet is a right, not a privilege."
Such talk might sound like revolutionary ranting to the largest wireless players.
They've been making huge profits from consumers who pay big money for unlimited voice and data plans.
How much money?
So much that Verizon just offered $140 billion (with a "b") to buy out the stake of Verizon Wireless owned by its partner in that venture, European giant Vodafone.
Verizon and AT&T are willing and able to subsidize the cost of the latest Apple and Android smartphones by about $400, on average.
For example, the lowest-cost model of the two newest iPhones, the 5c, costs $99 with a two-year contract at those carriers, but $549 out of network.
Sprint has long struggled to compete with the deep pockets of its rivals.
For the quarter ended in June, for example, including losses from the platform it acquired with Nextel, the company's net subscriber losses reached 2 million.
Given that, it's no wonder that the folks at Sprint's wholesale unit - which has lots of 4G LTE capacity - were willing to take a chance on FreedomPop, which had already been leasing Sprint's bandwidth for its free wireless data service.
"We don't think of this as just another innovative service offering," says Karen Freitag, vice president of global sales for Sprint's wholesale business unit. "We think FreedomPop is a game changer."
It's too early to know that for sure, of course.
In the meantime, Stokols and his posse are out scouring the docks for even newer, higher-end smartphones - and talking to handset device makers about co-branding them for FreedomPop's free and low-cost service offerings.
"We're just dipping our toe in the water," he says. "Very soon, you're going to be seeing a lot more $10 (monthly) data plans than $40 ones."