marked a milestone in the US market several months ago. Its agreement with Time Warner Cable permitting TWC subscribers to share bandwidth created a minor splash in the press and industry. A new insight published by Strategy Analytics, "Google-backed FON Aims to Sign Up One Million Member Hotspots in 2007," examines the deal and its possible implications.
"Since its early days, pay-as-you-go WiFi has been a tenuous business model at best," says Ben Piper, Director of the Strategy Analytics Broadband Network Strategies. "Few have made a compelling case for paying upwards of $8 simply to check email, download a presentation or surf." According to Piper, "While FON is poised to become a global player, the company will need to seriously ratchet up its marketing effort to succeed at this, and the financial backing of Google could prove invaluable in this respect."
David Mercer, Vice-President of the Strategy Analytics Digital Consumer Practice points out that "'Power to the People' movements are nothing new, and were it not for its high-profile financial backers, the FON story might have fallen under the radar. However, with upwards of $30 million in two rounds of funding from Skype, Google and Sequoia Capital, the story becomes more intriguing."
"FON's stated goal of surpassing one million hotspots in 2007 will be a key benchmark, and is a likely tipping point for gaining the traction it needs," according to Piper.