He says his problem with cell phones is that they can be used for surveillance. Later in the article he talks about how free software in the phone could protect you from eavesdropping (not surveillance). He is correct. If everything was encrypted, eavesdropping would be impossible. But they could still track your position.
So, unless I'm misreading things, he never says that the issue with surveillance is about "whether or not the software in the phone is 'free'".
Stallman wants to see a world built entirely with free and open software - in this world cell phones would be safe, since any and all surveillance-related code and functionality would be out in the open for anyone to see. There is no getting broadsided by sneaky surveillance code you didn't know was built into your phone.
Doesn't matter how open the source code is, the phone network still needs to know which cell you're in to direct your call. Knowing where you are is a fundamental part of the cellphone system.
So, unless I'm misreading things, he never says that the issue with surveillance is about "whether or not the software in the phone is 'free'".