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Crowdsource Your Way to Free Wi-Fi Everywhere

By getting people to share a part of their bandwidth, upstart Fon wants to build a no-cost web-access world.

This story appears in the June 2014 issue of Entrepreneur. Subscribe »

The number of public hotspots worldwide is projected to reach 5.8 million by next year, but that doesn't necessarily mean you can find free access whenever and wherever you need it.

Just ask Martín Varsavsky.

"I was in Paris looking for Wi-Fi, and there were so many encrypted signals," says the Madrid-based entrepreneur. "This was in the afternoon, and I was sure that a lot of people in the neighborhood were not at home. I thought, Why wouldn't these people want to share their signal with me? They're not even using it."

That frustration drove Varsavsky--whose résumé includes stints at European telecom firms Viatel, Jazztel and launch Fon, which crowdsources Wi-Fi to guarantee connectivity to more than 12 million private hotspots around the globe.

Fon users simply allocate a slice of their home Wi-Fi in exchange for free access to any other hotspot across the company's network. Each home signal is separated from the guest signal by a firewall.

"This is quid pro quo," Varsavsky says. "If you share your Wi-Fi at home, you can roam the world for free."

Consumers join Fon through a one-time purchase of its encrypted Fonera router, priced at $49. Some European fixed- and mobile-service providers, including BT Group and KPN, build Fon directly into their existing DSL or cable modems, bundling the service free of charge into a subscriber's monthly plan. (At press time, Fon was exploring similar deals with U.S. operators, but Varsavsky would not disclose which ones.)

For those without a Wi-Fi connection at home, Fon sells access passes to hotspots, available across multiple price points and durations ranging from one hour to five days.

To drive access to more connections, Fon introduced its WiFi For Your Business router, which not only allows companies to offer secure internet access to all customers but also provides a dashboard that shows anonymous user statistics, giving business owners deeper insight into customer demographics, foot traffic and peak sales periods.

"There's now an expectation for Wi-Fi in public spaces," says Matthew Brookshire, a manager for The Actors Fund Arts Center, a performance venue and rehearsal space in downtown Brooklyn that rolled out Fon earlier this year. "You expect that you can walk in and access, at minimum, the content of the place you're in."

Varsavsky declined to divulge information on Fon's financial growth, but a $14 million financing round led by Qualcomm, which manufactures the chips inside the latest Fon routers, should help the company recruit more hotspots around the world and reach profitability. "I believe real monetization will come," he says, "when we have at least 100 million hotspots."

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