FON on NYTimes
Tuesday, May 27th, 2008Great article about FON on New York Times. It also has some good insides about the company, business model and inevitably Martin Varsavsky (Mr Jazztel, Ya.com) profile & lifestyle. FON wants to build a wireless internet infrastructure on top of a grassroots broadband movement and sell internet access for nomadic users. I’m skeptical about FON’s business model since the beginning. A community of wifi owners who sells wifi access to strangers? They have 800k+ registered members (Foneros) all over the world but scale doesn’t matter here. Where are the wifi hotspots? In the hotel, near the cafe, the store, the airport or in the suburb, Joe Moe’s house? Location is primary for selling wifi access. And scarcity. Because you’ll only pay for internet when there is no other option. The hotels knows this and that’s why you have the high prices. And that’s why 3G sells. A guy sharing his broadband with a FON hotspot near the hotel will reach the rooms? I doubt it, even with an antenna (ok, maybe some rooms). I’m curious to know what percentage of members that are actually sharing their broadband. And you can’t ask for fair money if you don’t have a way to deliver a stable access quality over the wifi connection. Even if that is only for 1 hour. Maybe I’m not seeing all picture here and they are trying to make money with 3rd party agreements with ISP’s and even Apple (smells like iPhone). Even so. They’re paying a high price for dreaming with Ubiquitous Wifi and equipment subsidization (about 500k cash burned every month, it used to be 1 million). Ouch.
