Just over three months after launching its free portable hotspot, FreedomPop now says its ready for the second phase of its expansion plan—a free home wireless connection.

Like its portable device, which requires an $89 deposit to get 500MB of free mobile data over WiMAX, this new device (also with an $89 deposit) will offer 1GB of free data in nearly all of the 80 largest urban markets across the United States. Both devices can be returned for a full refund of the deposit within the first year of use. However, during the pre-sales period, the company considers the new Hub Burst as a purchase, not a deposit.

“You’ll get speeds of 9 to 12Mbps when it’s fully optimized,” FreedomPop’s CEO Stephen Stokols told Ars, saying that it would be comparable to DSL.

If users want more data on their Hub Burst device, they can take advantage of the company's freemium model, and pay around $10 per month for 10GB of access—significantly less than what most Americans pay for broadband access. The new router will act as both a wired and wireless router (including one Ethernet connection).

Disrupting DSL

Stokols declined to say how many users the company has so far, but he noted that increased demand had allowed the company to speed up its home wireless coverage by nine months.

“We had planned for six months of inventory, and it was gone after two months,” he told Ars.

FreedomPop, as we reported earlier, is backed by Atomico, a venture capital firm founded by Niklas Zennström (the Swedish co-founder of Skype). Just like Skype, the company hopes to significantly shakeup the residential Internet access and mobile data market—the latter is worth $80 billion alone this year alone.

“We want to be really disruptive, 50 percent lower than anything that’s out there,” Stokols said. “We’re going after the value, that’s the mass market for us.”

The company contracts with Clearwire to bring 4G data access, but plans on expanding to LTE via Sprint’s network.

Obstacles afoot

However, some analysts have expressed concern that FreedomPop is facing an uphill battle.

“I can see this being a disruptor for mobile hotspot based carrier revenues but not necessarily disruptor for text in-home connectivity,” Chris Silva, an analyst with the Altimeter Group, told Ars. “I think the latter is a very small market in comparison to what they claim to be disrupting.”

He seemed to indicate that if FreedomPop does switch over to LTE, then that may create a different scenario.

Clearwire’s footprint may not be large or fast enough for most users. (Full disclosure: I bought a portable hotspot from FreedomPop, which I use occasionally—while it works great in Oakland, up the road in Berkeley there is very little service.)

“Given the coverage of Clearwire's network today, I won't be surprised if FreedomPop suffers from negative reactions among customers who are dissatisfied with the quality of the service they get,” Charles Golvin, an analyst with Forrester research, told Ars.

Chetan Sharma, an independent telecom analyst, echoed this sentiment.

"For consumers who stay below the average and don’t need high speeds (don’t watch Netflix, games etc.), this is a good offer," he told Ars. "For consumers who do decent amount of streaming because of lower speeds and lower caps, the offer is not that attractive as it will hurt both the experience and the pocketbook."