Build your own phone company, says Fon chief

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User-generated content and social networking are disrupting the communications landscape, but what's next‾ According to Fon founder and CEO Martin Varsavsky, it's user-generated infrastructure.

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Varsavsky yesterday invited participants at a forum on 'business models that deliver' to 'build your own phone company and have fun.' And he was serious.

In less than a year Fon has created what it calls the largest Wi-Fi network in the world using the social networking concept. Users buy a Fon wireless router,then agree to share their home broadband connection with other users.

In return they get free Internet access around the world wherever there is a Fon access point. Or if they don't share their access, they pay two euros a day to use the service.

If the concept sounds similar to free phone service Skype, it's probably no accident - Skype founders Niklas ZennstrÅ¡m and Janus Friis are investors, as is Google. The company is also launching a 'Skype Fon,' a Wi-Fi phone that allows users to make free phone calls from any Fon access point.

Varsavsky dismissed concerns that such free services would hurt traditional telcos. 'People think we're the enemy,' he said, 'but we have 12 operators around the world who are our partners.'

'Innovation is seen as a destroyer but it's not, because we actually share revenue with operators,' he added.

Varsavsky has also experienced the traditional service provider world, having previously founded <‾xml:namespace prefix = st1 ns = 'urn:schemas-microsoft-com:office:smarttags' />Spain's number two carrier Jazztel, one of seven companies he has started. Others include Viatel and Ya.com, a Spanish DSL provider.

The Fon founder also advised mobile operators wanting to jump on the user-generated content bandwagon to think carefully.

'The biggest problem is that people want to have fun, but it's difficult to have fun in the narrowband world of mobile,' he said.

'3G is the network you use when you can't find Wi-Fi.'

Varsavsky told yesterday's forum that the industry was still an exciting one. 'In the case of telecom, I see a bright future as long as companies embrace innovation,' he said.

It was a point echoed by fellow panelist Ronald Spears, SVP business sales, AT&T Global Services, who warned that regulators could play a negative role in the future.

'Innovation and regulation are on a collision course,' Spears said. 'Regulation will be the enemy of innovation.'

Spears suggested that carriers could no longer be successful simply providing pipes for voice data. He said in the consumer sector, voice was crucial, while in the business world a global approach was needed.

'Large providers are going to have to provide solutions to business problems and do it on a global basis,' he said.