FON Tries To Make A Market In Undercutting Starbucks' WiFi Fees
from the the-decaf-of-business-models dept
While the commercial prospects of the WiFi network FON may not be clear, the company certainly is good at drumming up publicity for itself. It started off by letting users decide whether they wanted to be a "Linus" or a "Bill" -- Linuses let people use their hotspots for free, and in return get to use the rest of the network for free, while Bills charge for access, split the proceeds with FON, but don't get free roaming. It then got back in the news when it attracted some big-name backers, but a viable business model still doesn't seem to have emerged, despite comments from the company's charismatic founder that it wants to build a ubiquitous network and take on mobile operators. FON's been getting some ink again lately because it's been giving away thousands of free WiFi access points (with no real clear plan of how to ever generate revenues with them), and it's back in the news today with a plan to give free hardware to people who live near Starbucks locations. It's hoping to convince them to become "Bills" and generate some revenue by undercutting the rates Starbucks and its hotspot provider, T-Mobile, charge for access. FON charges $2 per day, compared to T-Mobile's $10 -- and then gives $1 to the user providing the actual hotspot. It's nice to see the company's taking some steps to try and generate some revenue -- since the problem from the outset has been that everybody could simply choose to be a Linus, and no money ever comes in -- but the plan may be built on the faulty assumption that there's actually a huge pool of Starbucks WiFi users looking for a cheaper day rate. Back in 2004, it certainly didn't look like Starbucks WiFi was making much money, and a lack of noise since then makes us think little has changed. Obviously $2 per day is a lot less than $10, but with so many other coffee shops and other places offering free WiFi, it's hard to see FON's plan generating much more than some additional publicity. And, last time we checked, publicity on its own doesn't pay the rent.