COO, Fon, Spain: “Operators cannot afford to not have a wifi strategy”

Alex Puregger is COO and director of the board for Fon, Spain and is speaking at the Broadband World Forum 2012, taking place on the 16 – 18 October 2012 at the RAI Exhibition and Convention Centre, Amsterdam, the Netherlands. We speak to him about why in a mobile broadband world Fon’s wifi based business model is set to be more relevant then ever.

How has the Fon network been developing over the last 12 months?

In the past 12 months, we have grown tremendously. At this time last year, we were at just over four million hotspots. Now, we have over six million hotspots in more than 100 countries. We have also signed three new partnerships: Belgacom (June 2011), Oi (October 2011) and Netia (February 2012), with many more in the pipeline.

As 4G rolls out worldwide will public wifi hotspots continue to be relevant?

4G will make people addicted to fast mobile internet, so with the rollout of this technology, mobile operators will more than ever be looking to offload their data traffic. Therefore, public wifi hotspots will become more relevant than ever, since they will enable mobile customers to seamlessly connect to public wifi hotspots, easing network traffic. 4G will not be a substitute for wifi or even 3G. All those technologies will complement each other, because the data traffic will be just too huge for one technology only. Naturally, we at Fon are all about wifi, and we believe in wifi as one of the most established and distributed access technologies around the globe. One that can contribute in various ways to help operators overcome their challenges, not only on the data traffic front, but also when it comes to differentiation. Nearly all gadgets nowadays come with wifi included, so it’s only natural to use this technology.

What is the business case for Fon? How do you monetize?

Fon enables operators to increase revenues by tapping into new customer segments. Additionally, they will gain from differentiation; after all, we’re a global community of over six million wifi hotspots. There are the obvious benefits that come with data offloading. This powerful combination of additional revenue and savings is the value that Fon brings to every operator.  We then monetise the network on the revenue site, where we apply a revenue share system. Right now, our revenue comes both from selling access passes to individuals who are not Fon members, and from our wholesale agreements which give third parties access to the network.

How does Fon fit into a carrier’s overall mobile strategy?

Fon’s offering is a powerful complement to the service already offered by mobile operators. Nowadays, operators simply cannot afford to not have a wifi strategy, first because they know that with all of the connected devices currently around, and all of the data-heavy applications that are coming to market, there will soon be a ‘data tsunami’ that simply cannot be handled by 3G or 4G. Second, because customers want wifi connectivity since a number of their favorite gadgets come in wifi-only versions.
When it comes to our partners, Fon is an integral part of their mobile strategy. And thanks to our innovative wifi solution, mobile operators from all over the world want to work with us, and include Fon in their mobile strategies.

Connecting to unfamiliar wifi access points is still a pain point. What work is being done to improve this?

The fact is that the customer experience with wifi is unfortunately still decentralised and different with every different access point – for example, some private hotspot owners just open up their network entirely.  However, wifi was developed as a private, and not as a public access technology. The silver lining is that this is changing, together with the widespread use of wifi that we see today.  A large wifi footprint such as ours that is harmonized in its access controls and operations can make a difference. Our mobile applications already allow for automatic connection of smartphones with many of our partners, so our users just connect wherever they find a Fon Spot. We are also seeing much more improvement in this area, particularly with the wifi Alliance’s Passpoint program. This program aims to make it easier for users to connect to wifi hotspots, along with easier roaming and network management.

In a few years, connecting to a wifi hotspot will be completely different from what we’re used to.
In a few years, wifi hotspots will behave much like mobile networks do nowadays, in the sense that seamless auto-connection will be the standard. For the end user, it will be a world of difference because they will be connected and able to load all of their applications at all times, so their home experience will be with them wherever they go. In fact, they will not even be able to tell wifi , 3G and 4G networks apart, they will have incredible download speeds wherever they go, and it will just work.

Why do some manufacturers, such as Apple, only enable certain applications over wifi  and is this the correct approach to take?

Heavy applications are terrible for 3G/ 4G networks, since they generate a lot of traffic, creating a poor user experience. By enabling certain applications as wifi only, these manufacturers are not only helping relieve 3G/ 4G traffic, but are also ensuring that the users on their devices have the best possible experience whilst running those apps. Additionally, certain limitations such as allowing VoIP applications only via wifi are imposed by carriers, and not by device manufacturers.

What impact on the market do you foresee the arrival of 802.11ac equipment having?

802.11ac is an increment over existing technologies. The advantage is that it gives users more bandwidth per access point. Obviously, this is very attractive, but AC only works over 5GHz, instead of 2.4 and 5GHz for 802.11n, so the propagation will have a shorter range. This makes it more challenging for public settings, but is ideal for home use, particularly for bandwidth-heavy tasks such as streaming video. Routers and access points are only just starting to appear in the market, so it will be a while before there is critical mass. Fon will support 802.11ac once it sees there are sufficient numbers of compatible devices out there.

What are the biggest challenges you expect to face in the next couple of years?

At Fon, our biggest challenge is handling our phenomenal network growth, as we are expecting up to 50 million hotspots in the next five to six years. Obviously, we want to continue offering a great service to our members, so we will have to manage this growth carefully. One of the main challenges with the wifi industry in general, is ensuring that wifi will offer a great user experience with all kinds of devices.

Fon is an innovative solution. Do you think there is enough innovation in the broadband industry and if so, where do you see it?

There is a lot of innovation happening in the way people use broadband access. In fact, this is one of the industries with the most changes. Of course, these changes bring challenges and opportunities. Currently, both fixed and mobile providers are facing many challenges when it comes to protecting their current business models. Whilst this is daunting, it creates many opportunities for providers.  This is a growing industry with increasing relevance for consumers. Innovation lies in improving access speeds, combining different access technologies and then of course in improving new services and applications for the consumers.

Why are you looking forward to speaking at the Broadband World Forum?

Six years ago when we first started, some people expected Fon to fail, especially operators, who doomed wifi. Now, the situation is completely different. Everyone realizes that wifi is an integral part of our lives, and has to be an important part of hybrid networks. For us, this is the chance to present Fon and to learn from others where they see the industry going. We hope to meet lots of interesting people and to have many interesting discussions.

The Broadband World Forum 2012 is taking place on the 16 – 18 October 2012 at the RAI Exhibition and Convention Centre, Amsterdam, the Netherlands. Click here now to register your interest.