FON Secures $21.7M to Create WiFi Planet

Niklas Zennstrom, Janus Friis, Danny Rimer and Mike Volpi Join Board

MADRID, Spain, Feb. 6 /PRNewswire/ -- FON, (www.fon.com) a company
focused on creating a global network of shared WiFi connections, today
announced that it has secured euro 18 million (USD$21.7M) in Series A
funding from Index Ventures, Google, Sequoia Capital and Skype. Index
Ventures led the round. The company also announced that Danny Rimer
(Index Ventures), Mike Volpi (Cisco) Niklas Zennstrom and Janus Friis
(Skype) joined the board. Existing board members include Martin
Varsavsky, FON CEO, and Antonio Fuentes, FON CFO. This announcement
illustrates the willingness of leading technology companies and
venture capital firms to jointly invest in the development of a global
WiFi infrastructure.

Founded just three months ago by serial entrepreneur Martin Varsavsky,
FON's objective is to build a global WiFi network bottom up, with one
million hot spots by 2010. To do this, FON users, or "foneros," are
able to connect to the Internet via FON WiFi hotspots provided by
other foneros. For foneros, the development of the FON global network
means they will be able to connect to the Internet safely and securely
all around the globe. For service and application providers such as
Skype and Google, the FON network makes their services more
ubiquitously available. For ISPs, FON provides a way to expand their
reach globally. For developers, the FON network is a new platform for
creating and delivering services on a global scale.

With a simple download-and-install approach, similar to Skype's, FON
is a secure "by-the-people, for-the-people" network. FON has
registered 3,000 members since it went live with a beta of its service
in November, 2005. The company plans to use its funding to grow the
network of foneros and support the growth of WiFi worldwide,
particularly in countries where broadband is currently unaffordable to
most people.

FON will drive its revenue from a multi-tiered subscription model.
Members sign up in one of three foneros categories: Linus, Bill or
Alien.

* Linus members share their home WiFi hotspot with the FON network and can

use any FON hotspot for free.

* Bill members share their WiFi hotspots with Alien members for a fee.

Bills cannot roam the FON network for free.

* Alien members pay to use the FON network on an as-needed basis.

Fifty-percent of revenue generated from Aliens will be shared with

Bills. Alien memberships are currently available on a free-trial basis.

"Aliens are at the heart of our business model," said Varsavsky. "As
we continue to grow, we will attract consumers for all three foneros
categories and achieve our goal of creating a global WiFi nation. This
is a great opportunity for ISP's, bloggers, developers, early
adopters, consumer electronics manufacturers and the 'average Joe or
Jane' with a WiFi connection to make money by letting other foneros
connect to the Net safely and simply."

ISPs are already signing up to partner with FON. "As a leading ISP in
Sweden, Glocalnet is happy to partner with FON as the concept will
enable us to bring even more value to our offering. Being able to
offer internet access when out of home at no extra cost is a strong
selling point," said Martin Tiveus, marketing director of Glocalnet.
FON expects to announce other ISP relationships soon.

"There is perhaps no more important goal for the industry than helping
to make broadband Internet access available around the world," said
Skype CEO Niklas Zennstrom. "FON has a great idea to help people share
WiFi with one another to build a global unified broadband network, and
we're happy to lend support. Enabling more communities to tap into the
power of the Web benefits us all."

Power Foneros

FON has attracted the likes of some of the technology communities'
leading advocates. The well regarded blogger/former newspaper
columnist Dan Gillmor and telecom expert David Isenberg have already
signed on to serve on the company's board of advisors, as has Esther
Dyson, the well-known blogger Joi Ito and many others. For a complete
list of the board of advisors visit
http://en.fon.com/info/who-is-behind-fon.php

Prior to launching FON, Varsavsky, founded the second-largest Spanish
Internet company, www.ya.com, and the second-largest, publicly-traded
telecom company in Spain, www.jazztel.com.

About FON

Founded in 2005, FON is a community-empowered company dedicated to
building the world's largest global WiFi network bottom up, spreading
the power of WiFi around the world. Headquartered in Madrid, FON is
backed by Google (Nasdaq: GOOG), Skype (Nasdaq: EBAY), Index Ventures
and Sequoia Capital. For more information on how to join or partner
with FON, visit www.fon.com.

Editor's Note: Quote sheet below

Executive comment on the FON funding announcement

"We're very excited to be the lead investor in FON," said Danny Rimer,
general partner at Index Ventures. "In the same way that Skype filled
a communications need, we believe that FON fills the need that people
have of people getting connected to the Internet anywhere they go.
Martin has created an elegant technology solution coupled with a
highly viral community that could have the business impact on the
broadband market that Skype has had on Internet communications."

"What Martin and the people at FON are doing is making it easy for
people to access Wi-Fi anywhere. This is exactly what we had in mind
as a logical next step as Skype began to proliferate across desktops
worldwide, so we're delighted to be a part of the FON revolution,"
said Janus Friis, Skype co-founder.

Mike Volpi, Cisco: "Ubiquitous broadband is providing people access to
information and entertainment in an unprecedented way. Consumers can
have access to the power of broadband untethered to their devices and
FON is paving the way."

Dan Gillmor: "The Web fuels communities, and so does FON. When
like-minded folks get together, they can accomplish amazing things."
SOURCE FON