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FON Gives Away More Free Stuff

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We stopped by the so-called FON Freedom Friday event in Union Square this afternoon, and watched the WiFi-sharing company give away 500 FON routers to those milling around, mostly workers on their lunch break. By the time we left, around one P.M., they had given away about half of the routers. It’s not too hard to give away free routers and get people to take them — the hard part will be making any money, especially in the U.S.

Joanna Rees Gallanter, the company’s new executive in charge of U.S. operations (we previously covered the departure of former US chief Juergen Urbanski) was there handing out the goods with the rest of the crew.

We asked her how giving away routers combined with free WiFi access would make a good business model. She said the low cost subscription fees for non-community member day passes will bring in revenue, plus once the company gets to a sizable amount of users there are other ways to bring in revenue from a large community.

FON is a noble idea, but still it might take a lot of investment for them to get a great user base. Then again Google and Skype are investors, so maybe they know something we don’t.

16 Responses to “FON Gives Away More Free Stuff”

  1. The quality of broadband access will definitely be a key aspect of the equation.

    In favor of FON: the price of broadband in the US, which is outrageously expensive compared to the quality (downtime) and to the rates you get (3 Mbps is considered premium). This definitely gives financial incentives to share your broadband, and eventually make money out of it, even if your provider conditions of use prevent it.

    Not in favor of FON: the quality and the availability of broadband in the US (mentioned above), which makes the coverage of FON spotty, and the quality of the service unsure.

    When you compare this to Europe, where you have triple play services (unlimited VoIP, +20M Internet, and IP TV/broadcast TV) for 30-40 euros a month, the value proposition of FON does make sense. People don’t mind sharing their connection as it is already very cheap. People are not “afraid” of connecting to FON, because they know that the average Internet connection is reliable. FON allows a connection on the go, among other things. Some European operators (BT in UK, Neuf Cegetel and Erenis in France) understood the value of FON as a differentiator in their offers.

    To summarize my point, if there was more competition in the US in the access, bringing innovation and enhanced services, increasing penetration, FON would have greater chances to succeed. The key remains in the access more than ever: ubiquitous access, faster broadband, cheaper service. These are the 3 keys to success for FON.

    Signed: a European Telecom guy living in the US

  2. I’m part of FON, and some of the comments above are justified. Some aren’t. I got on board long enough ago that I paid (a reduced rate) for my router. One of the attractions for me was that it was all set up to go, since I’m not much of a geek. As soon as I received the router, I was told to upgrade the firmware and do all sorts of time-consuming and effortful stuff I’d been hoping to avoid. This was annoying, and delayed me becoming part of the network by months. Take home message there is that FON needs to have ready-to-go routers, and/or one-click installs, with a lot more support than they do now. (Their support people are very good, they’re just way overworked.) They also need to stop crippling their routers. Bloody stupid.

    All that said, it was very convenient on a couple of occasions to hop onto someone else’s network when I was out of town. Yes, it’s the sort of thing that’s more useful with more people, but I think assuming there won’t be more people connected is like betting against the tide.

  3. Free wireless and even free broadband will come.

    Less than 20% of the total population in the world has internet (broadband or wireless).

    How else can this industry keep growing? Goggle and skype DO know what they are doing.

  4. 500 routers covers 1/5th of a square mile, not 1/2. When viewed in three dimensions, the coverage is even less.

    In a month, most of these routers will sit in a closet shelf with other freebies. It’s an expensive way to scatter brochures into the wind at $50 cost each.

  5. “plus once the company gets to a sizable amount of users there are other ways to bring in revenue from a large community.”

    They will probably go the normal route of inserting wifi interstitials, rewriting pages, proxying, etc. Basically anything annoying you can imagine.

    Of course they won’t do this until they have a large deployed footprint because otherwise nobody would ever be dumb enough to deploy it.


  6. Free wireless is going to be huge. Lets say Google invests billions, if every user is forced to visit when they log on, it would be worth it. It’s a win-win that most people would welcome with open arms. Be patient, it will happen eventually.

  7. anonymous

    500 Linksys access points, each with a range of 100 feet? Great. If they all get plugged in and turned on, 1/2 of a square mile of San Francisco will have wireless.

  8. Roupen N.

    The U.S. (even California – even Northern California) is too big for something like this to gain enough momentum to matter.

    FON have the Google map mashup going on their site – enter your zip and see FON Hotspots are around you. I did that and I was hearing crickets (nothing) for miles and miles…

    Maybe in smaller geographies like Estonia or Armenia or something and you would get enough DENSITY of users… I dont see this getting anywhere in the U.S. NOT TO MENTION Muni-Fi and Metro-Fi.

    The article ends with “…so maybe they [Google/Skype] know something we don’t.” I keep saying the same thing but I am not seeing even a hint of what that might be.

  9. Nobody knows how this is going to work. Effort and solidarity among users is a good idea, but we do the same sharing the broadband wifi connection in every building. More reliable and the same prize.

  10. 1) FON is supported by google and ebay, cisco/linksys… both have huge interest in making more people go online
    and making internet a greater part of the people’s daily life.

    2) fon routers are avaliable for 5$.. they are the regular 30$ linksys routers… with some modifications. so quality is good

  11. FON? No biz model, useless services, broken routers … It is simply amazing that media still covers them.

    FON is a vaporware. They are giving away free routers because nobody is buying them. What does FON have to lose? It’s VC money.

  12. The #1 problem FON has is that the routers are in utterly useless areas 99% of the time. They will be in the suburbs or similar useless places.

    Not to mention the amount of broken internet connections people have. I wouldn’t be very happy to pay the €3 just to find out that the backhaul internet is broken, disconnects every 2 seconds or hopelessly slow.

  13. Jesse Kopelman

    Google and Skype are investors, but they don’t need FON to be profitable for their investments to be worthwhile. The key for them is that access to broadband be as low cost and ubiquitous as possible. If FON is able to put pressure on incumbent operators, even while slowly bleeding to death from negative cashflow, that will be good enough for Google et al.