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Reuters says that Fon will charge $5/€5 plus shipping and tax for a Buffalo or Linksys router: In exchange, the Fonero must remain on the phone network for 12 months. The Fon network relies on principally wired backhaul purchased separately by the Fonero, and expects the Fonero to observe local network limitations, but doesn’t enforce ISP no-sharing policies. They’re working to sign more ISP partners who will appreciate the line-land-to-hot-spot notion. (They’re charging the same unit value in euros or dollars for all their services, it looks like.)
Fonero who share their connections at no cost to other Foneros can use all Fon locations at no cost. Those that charge a day fee (about $3/€3, intended to discourage non-Fonero use of Fon spots as a replacement for an ISP connection) have no free roaming privileges, but their locations may still be used by no-fee Foneros for no fee.
One million routers sold for $5/€5, even with a great purchase deal, could translate to $20m. And they just raised slightly more than that a few months ago. Since there’s no revenue pipe as of yet, this is tricky math until they explain more of the details.
Update: A commenter notes below that the billing system, noted at the end of the Reuters article, will provide revenue. I’m still not confident of the revenue side of Fon given the emphasis on and clever marketing of the Fonero-to-Fonero connection. Still, at $3/€3 a day per occasional user with a million routers, Fon’s take could be sizable if the idea has legs.
On Fon’s English blog, they floated the idea of purchasing five days for $2/€2 per day. Fon just launched a new site design today as well.
Posted by Glennf at June 25, 2006 12:50 PM
Categories: Hot Spot
TrackBack URL for this entry:
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Routers are not free. There is cost associated, one year contract and possible security hole as any stranger can access network.
FON has lots of problems and so far it has been useless.
Posted by: ll at August 7, 2006 5:35 PM
Sounds like a great way to give poor students some almost-free wireless routers :-).
Remember CueCat?
[Editor's Note: Remember it? I have one in my office in its original American Airlines sponsored Wired magazine box.--gf]
Posted by: Seth Finkelstein at June 26, 2006 11:50 AM
They also announced a billing system as well, so there is a revenue model. Check out the Reuters story:
Dave
Posted by: David Sifry at June 26, 2006 3:14 AM
They have just launched their "Bill" model, which allows a "fonero" to share his connection while earning money (instead of sharing for free as the "Linus" does) and FON earn money this way so this should generate revenues.
Also, if they manage to get high numbers of foneros through this subsidy, I'm sure they'll raise another round of funding.
I certainly don't agree with the recent comment from David Ulevitch as I think that once FON reaches a critical mass, there will be a lot of viral marketing and people will pay a normal retail price for their routers. Time will tell!
Posted by: Nadim Saad at June 26, 2006 12:57 AM
A year from now we will look back on this as one of the biggest wastes of money and failed "forced adoption" attempts in recent history.
Users aren't stupid.
Posted by: David Ulevitch at June 25, 2006 4:00 PM