US-based MVNO FreedomPop, which offers all of its services over IP, has started selling its first smartphone package.

People in the US can now buy a refurbished HTC Evo Design for $99 – a two-year-old Android handset – and get their first 200 minutes, 500 texts and 500 MB of data every month free of charge.

After that, they can pay for extra data or opt for an unlimited package for just $10.99 per month. Customers can call or text anyone using their FreedomPop handset and phone number. The OS has been updated so the phones keypad is linked to the FreedomPop app. FreedomPop also offers data sharing and trading, essentially creating a broadband currency.

The company buys 3G and 4G data in bulk from Sprint, which enables it to offer low-cost and free services, and said it will start selling higher-end, 4G devices when the service comes out of beta. It already has more than 100,000 customers – with around 45 per cent paying something.

FreedomPop started out offering freemium 4G internet hotspots for mobile users. The company has raised more than $16m since it launched in 2011.

It is not, however, the first-to-market with such an offer. Competitor TextNow launched its VoIP handset packages in the US in August, offering customers the Samsung S2 and Nexus S. TextNow funds its free services with ads and its monthly plans start at $18.99.