A FON user story that should make Martin happy

My colleague Usman Akram recently became a Fonero.  I have expressed some concerns or doubts about the model in the past, but the buzz is not abating.  I may have to eat my words.  Look at his story so far:

I purchased a FON “Social Router” 3 months ago, making me “Fonero” number 58,360. I paid € 24 for my wireless router and agreed to FON hiring out up to 512 kbps of my precious bandwidth so that I could begin “milking my Wi-Fi”. Over the weekend I discovered that € 5.30 had been credited to my “Piggy Bank”. It turns out some passing “alien” had bought 5, 1-day passes last month on each of 5 consecutive days – one of my neighbours perhaps? The alien paid € 3 on each occasion and my cut was € 1.06.

My economics
I paid out € 24 initially for a Wi-Fi router that would otherwise have cost me ~€ 40. With the credits, my outlay has been reduced to € 19. Looking at my local coverage map, there aren’t many other Foneros in my area, so I’m hopeful about earning future revenue

The alien’s economics
The alien paid € 3 for each day’s access. Cheaper than most public Wi-Fi spots, but not as cheap as Starbucks.

FON’s economics
On my installation they subsidised my router to the tune of ~ € 20 (€ 16 for the router itself, plus say € 4 of postage). After a revenue share with me, their net revenue on the installation has been € 9.70. So, still down € 10.30 on a marginal unit basis, but it’s only 3 months in.

Atlas’ economics
Should Atlas claim a revenue share on my income? It does pay for my Broadband after all. ;-)
Usman: you bet. 70/30. Watch that paycheck.

technorati tags:, ,

This entry was posted in Startups. Bookmark the permalink.

Comments are closed.