I would like to apologize to those who tried to buy the FON plug and play routers and only got to reserve them. What happened is that we ran out of them and we had to buy more and hire more people to flash them. We are taking orders again now and we plan to deliver the orders in less than 30 days.

This is a problem that we were trying to figure out how to solve.

I have made the case of why FON is great for ISPs. We have signed our first agreement with Glocalnet, Sweden´s second largest ISP, an amazing competitor to Telia and we are in the process of negotiating with another 11 ISPs in the United States, Europe and Latin America. Now can we make a case that FON is great for mobile operators? This one is a harder case to make but let me try to make it.

First I would like to say that in Europe mobile rates and GSM ARPUs are much higher than in America. In Europe GSM operators are getting around 1000 euros per year per customer, in America around half of that. In America operators sell big buckets of minutes, in Europe operators charge customers very high per minute charges, incredibly high fixed to mobile rates that the mobile operators keep and extortionist roaming rates.

Still my prediction is that in the next 3 years there will be a huge price drop on mobile in Europe and ARPUs will fall to half of what they are now, say 500 euros per year.

Now when Europe goes to flat monthly pricing, a similar system to that of the States, FON will be a friend of GSM operators. Why? Very simple, once you collect a flat rate pricing rate what you want is less usage, so you have to invest less in the network. At that point Dual WiFi GSM phones go from being a curse to being a blessing as a lot of traffic would leave the network through WiFi simply cause phones would detect it and so users do not pass a theoretical high bucket limit set by the GSM operator. In this way GSM operators rely on WiFI to invest less. Moreover WiFi is great for many in building sections that are not reached by GSM operators.

ARPUs in different countries
ARPU O2 in Ireland

Rebecca Buckman from the Wall Street Journal wrote an article on today´s WSJ in which she questions the validity of FON´s advisory board members comments on their blogs about FON. I think Rebecca is right in one point and wrong in another one. Rebecca Buckman is right in saying that readers who go over comments written by a blogger who is also an advisory board member of FON should be warned that these comments are coming from people associated with the company. But Rebecca is wrong in saying that these warnings had not been made. I for example have been frequently blogging about each of the advisory board members and all of them individually had blogged about their involvement with Fon. There was no secret there and Rebecca should have researched this more thoroughly. And in any case having spoken with Rebecca quite a few times my take on this is that Rebecca, representing old media found it tough to accept that the announcement of the FON funding deal first came out on my blog and then in her paper the venerable WSJ. Sorry Rebecca but part of the appeal of FON, other than its service is that we are a blogged company and in any case I would not have announced the FON deal in a publication that requires its readers to pay to access its content on the internet. Other than that I would like to say that I love the new format of the WSJ in Europe. It´s so much easier to carry and to read than the old one!

There are many municipal Wi Fi projects around the world. These projects involve getting weather proof Wi Fi hotspots and installing them around the cities. At FON we believe that the best solution for a city is not a pure hotspot solution. Instead we believe that the best solution is citizens of a city with FON routers by a window combined with some hotspot investments on behalf of the city in key locations. We have been talking already to a number of cities whose names unfortunately we cannot yet disclosed and the reception has been great. The key here is that behind the municipal wifi movement there´s a war going on with the telecom operators on one side and the cities on the other. But with FON both cities and telecom operators win. Cities win because residents put their routers by their windows and provide free roaming to each other only after PAYING the telecom operators. And operators win because they get more customers and because they make more revenues as non residents pay to use the networks. FON then is either a free network for residents and a paid network for non residents. But the prices for non residents or aliens like we call them, coming at $2 a day, are very, very reasonable. $2 per day is a price that is not low enough to encourage you not to sign up with a telecom operator if you are a resident (as bandwidth costs less than $60 per month) but it is low enough for visitors into a city to feel that if they want wifi they can get it everywhere for a very reasonable amount.

I just read Forbes article on us. I understand Dan´s views but I am not sure he understands ours. When Dan contacted me I was on route from San Francisco to London where I recently landed only to see his article on line. I wish Dan Frommer was a more patient journalist and had given me 24 hours to reply.

Dear Dan, I am the founder of three ISPs, Viatel, Jazztel and Ya.com and believe me FON is not only not against the ISPs, FON is a boom for ISPs that will generate more broadband clients and more ARPU. FON invests in a wifi platform that is provided for free to ISPs so they can sell wifi roaming as a feature at no cost to them. And on top of that FON makes ISPs realize that they are seating on untapped potential extra revenue (payments from aliens) that we uncover and share with them. We know that some ISPs have terms of service that prevent users from becoming foneros. We do not want to encourage anybody not to respect these terms. We are instead working with ISPs so they endorse FON´s wifi roaming platform and then foneros sign up.

I have been reading articles on FON that call us the P2P of WiFi or the Napster of WiFi. What these writers fail to understand is that my whole career was built in the ISP world having started Viatel, Jazztel and Ya.com and that I created FON as a way to build a global wifi network and boost ISP revenue. FON is great for ISPs because FON pays for all the incremental costs of roaming to the ISP, because an ISP can sell an extra feature to a customer (pay for bandwidth at home have bandwidth all over the world) at no cost to them, and because when we make revenues from aliens (non foneros) we share it with the ISPs. ISPs are seating on potential extra revenue that FON untaps for them. Indeed if you are reading this and work for an ISP please contact us and we will explain to you all the advantages of making your ISP FON ready.