The first free 5G plan in the US: not without obstacles and uncertainty

Yesterday we told you about Helium Mobile and how it unveiled the first free 5G wireless plan in the US. It's called Zero Plan and it arrives with 3GB of data, 300 texts, and 100 minutes of calls. The network rewards users through its Cloud Points program for activities like referrals and location sharing, which can be redeemed for various rewards.

The free 5G service in the Zero Plan will face some pretty serious challenges and battles ahead, particularly in sustaining growth and overcoming technical hurdles. The mobile virtual network operator (MVNO), which operates on T-Mobile's network, aims to expand its user base beyond its current stagnation of around 100,000 customers.

While the promise of free service may attract a great deal of people – potentially, we all want things to be cheaper, and zero is a great monthly fee in theory – the sustainability of such a model remains uncertain. There's a detailed report at Light Reading that outlines what Helium has to deal with.

What's what – and why others have failed at it

One of Helium's key strategies is its Cloud Points program, which rewards users for sharing anonymized location data, completing surveys, and referring others. This approach is reminiscent of previous attempts in the industry to incentivize user engagement, but many of these efforts have failed in the US market.

The location data is essential to Helium's broader goal of building a decentralized wireless network (DePIN), where users are encouraged to install Wi-Fi hotspots in high-demand areas. While Helium has managed to establish around 26,000 Wi-Fi sites, questions remain about whether this approach can scale effectively.

The freemium model Helium is pursuing has been tested by other carriers, often with mixed results. While some companies, such as FreedomPop, initially found success with free-tier services, most eventually struggled to convert free users into paying customers at a sustainable rate.



Even Sprint's attempt at offering a free year of service in 2017 failed to retain users, as many customers returned to their previous carriers despite significant savings.

Adding to the complexity of Helium's ambitions is its reliance on cryptocurrency, the report says. The company initially attempted to build a decentralized Internet of Things (IoT) network using blockchain incentives, but that effort never gained substantial traction.

Helium's move to offer cellular services using community-built 4G infrastructure in the CBRS spectrum was too difficult, so it switched to focusing on Wi-Fi instead. The CBRS spectrum is a range of wireless frequencies in the US that allows both private and public users to deploy their own cellular services, offering more flexibility and efficiency.

Now, Helium relies on its cryptocurrency system to encourage people to set up hotspots, but its token has lost a lot of value since it was at its highest in 2021-2022.

Despite these challenges, some investors remain optimistic, believing that Helium's model could eventually disrupt traditional MVNOs like Mint Mobile and Boost Mobile. However, with its valuation per subscriber estimated at around $10,000 (far exceeding industry giants like T-Mobile and AT&T) its long-term viability remains uncertain, particularly when many of its users may only be there for the free tier.

What do you think? Are you signing up to the waitlist?