FreedomPop, a U.S.-based free mobile phone service provider, plans to begin selling refurbished, used smartphones in several American and European markets for a fraction of the cost of new handsets.
FreedomPop said it will sell used smartphones at up to 80% off the manufacturer's suggested retail prices initially the United States, Britain, Mexico and Spain.
The Los Angeles-based company, backed by top venture capitalists, said it aims to make in-roads into the highly fragmented used-phone market by creating FreedomShop, a centralized market for certified, pre-owned smartphones.
Globally, consumers are expected to trade in more than 120 million phones next year, generating wholesale revenue of around $17 billion, the company said, citing data from Deloitte Global.
Deloitte estimates that the refurbished phone market is growing four to five times faster than the sluggish new phone market, which market research firm Gartner estimates will grow a modest 1.6% in 2016 to 1.5 billion units.
FreedomPop said it has established relationships with more than 200 refurbished smart phone suppliers stretching from multi-billion dollar logistics players that manage trade-in programs for U.S. carriers to small family-run wholesalers.
It said it will offer consumers a 30-day "no questions asked" money-back guarantee for phones bought from it.
To date, FreedomPop primarily offers various free mobile voice and data packages in the United States and Britain.
It also recently entered the Mexican market through a deal with pay TV joint venture Dish Mexico.
Since its founding in 2012, FreedomPop has raised $109 million in funding from leading venture capital firms including LetterOne, Mangrove Capital, DCM, Partech, Intel Capital, Axiata, and Atomico.