Working with the ISP

Martin, congratulations to that deal. Simply amazing.

Teo, how is it good for T-Mobile with their hotspots and the revenue therefrom? Or how would this be good for cingular or verizon (HSDPA and EVDO)?

How would it be good for any mobile company to lose say half a million paid minutes per month to people using Skype over wifi?

Just wondering because it seems disingenuous to say it is good for the providers when that isn't necessarily true for all providers...

Oliver

io ho un internet point e vorrei ricevere informazioni sulla possibilità di usare il sistema fon in italia.....ciao

I would like to see an answer to the above post.
I pretty much share the same concerns and I don't see the benefits of a revenue share on the one hand if the ISPs are losing a lot of money on the other hand.
Just my two cents!

Its quite simple: More than 90% of all Telco and ISP clients do not use any mobile data services due to the high costs. None of them will ever use UMTS or HSDPA at a rate of at least several Euros per hour. Not being online while away from home they wont use any extra services as well - no music or video download, no location based services, no added value communication etc.

Today most ISP generate a huge amount of their revenues with these extra services, not by online time only. So they should be very interested in every mobile online customer FON generates for them. With absoultely no investments into hardware and a decent revenue share. All other ISP business models should be outdated by now..

Roberto,

first of all thanks for pointing me to the answer. I can follow your argumentation and I would
even say you're absolutely right with your first paragraph. The costs are too high and they will/
will have to go down.
However I do not agree with the fact that a huge amount of revenue comes from extra services, not
yet. In fact most ISP are just offering a huge variety of so-called value added services to keep
their prices stable. Without additional services, e.g. just offering the basic internet access,
they would be forced to lower the prices constantly due to competition. This is because there is
no reason for the end customer to go with a more expensive ISP - basically a 1M line is a 1M line.
And even with additional features they have to improve their services permanently in order to keep
the prices.
In addition to that the FON-enabled ISP should very well calculate additional costs, either in
terms of hardware by improving the infrastructure to be able to serve all the Foneros or simply in
terms of additional traffic that results in additional costs. Why do you think do a lot of ISP
quit a customer's contract from their side if the customer _really_ takes advantage of a flat rate
based access - because this is too expensive for the ISP since all prices are based on a mixed
calculation.

So what you say is, the benefit/additional revenue that FON achieves for the ISP by generating
mobile online customers and a revenue share, is higher than the additional costs for improved
infrastructure, increased traffic etc., also including the revenue that is not generated at all,
because the customers directly switch from not using the costly mobile data services to the free
of charge FON, without even becoming a paying customer? I don't think so!
What ISP really need in my opinion, is a value added service that is worth the money, that creates
customer loyalty, reduces churn and keeps them out of the price pressure described above.
Currently, I don't see FON representing this. Instead the ISP has to do investments in order to
wait that FON will generate mobile customers that are hopefully also spending money for extra
services.
To me, this doesn't look like a win-win situation.