Free Zone crowdsources Wi-Fi to bring Latin America online (exclusive)

People in Latin America are coming online at rapid rates, but that doesn’t mean their connection is good. Movile’s Free Zone app is making Internet access more available and affordable to people across the continent by crowdsourcing Wi-Fi.

Movile was founded way back in 1998 to build applications for feature phones. When smartphones began their meteoric rise, the company shifted to building smartphone applications and today serves 20 million monthly active users. However, for many people in Latin America, connectivity remains an issue. Data plans are expensive and the networks are slow. Free Zone was developed to make people aware of Wi-Fi around them so they can find a quicker connection, without the cost.

“Connectivity is not a solved problem, especially in emerging markets,” said Movile cofounder Eduardo Henrique. “We are using mobile to get the middle class, which is 50 percent of Brazil’s population, connected. Most of these people haven’t had Internet access, but this is changing fast. Giving the middle class access to the Internet will create a boom across other sectors, which is good for everybody.”

Wi-Fi hotspots can be costly, hard to find, or difficult to subscribe to. Free Zone makes it easier by crowdsourcing the hotspots so people can open the app and see what available networks are around them. Since Free Zone first launched last year, it has added 220 million hotspots to its database and has 12 million verified hotspots in the network. Over a million of these were accessed last month, and the app has eight million users.

After seeing high demand for this product, Movile saw an opportunity to expand the app to commercial Wi-Fi hotspots as well and charge users a subscription fee for access. It partnered with Boingo, which powers 700,000 hotspots in high-traffic places like airports, hospitals, train stations, malls, entertainment venues, etc. Premium Free Zone users pay a $9.99 per month fee and gain access to these hotspots all around the world.

Latin America’s Internet population grew faster than any other global region in the past year. Movile’s biggest markets in Latin America are Brazil and Mexico. Brazil has 100 million Internet users. A study from Yahoo Insights found that by the end of 2012, more than 51 million Brazilians went online with mobile devices, and an estimated 67 million will access the mobile Internet in 2013. 16 million smartphones will be sold in Mexico in 2013, according to market researcher IDC, and the country has 10.7 million mobile broadband subscribers. While the percentage of people using smartphones is still small, Henrique said, the growth rate is “insane,” and penetration rates are likely to triple in the next few years.

As tens of millions of people begin accessing the Internet, government, telco corporations, and mobile carriers need to respond accordingly. Connectivity is a limited and valuable resource in Latin American countries, and the coverage needs to be scaled to meet rising demand. This issue is particularly pressing for Brazil, which is hosting the World Cup in 2014 and the 2016 Summer Olympics.

“The government made agreements to improve connectivity and add 4G plans, and the carriers also had goals to meet because of the big events,” Henrique said. “But it’s not enough — that’s why Wi-Fi is super important. All this momentum and all these travelers from around the world will make the government work harder to improve the connectivity.”

The Brazilian government has been in hot water with its citizens as a result of preparations for these events. It spent an estimated $15.4 billion on the World Cup and the extravagant spending set off a string of protests around the country. Citizens are angry that money is being funneled into sporting events and tourism when it could go towards schools and health care. However, if the organizations build a better, strong, Internet infrastructure, this will in theory benefit the population long after the events are gone.

Movile is active in 20 countries and is connected to more than 40 carriers. Latin America is its primary region, but the company is looking to expand Free Zone around the world through partnerships like the one with Boingo. Fon and Open Garden are companies attempting a similar feat. Madrid-based Fon has 11.6 million “Fon spots” around the world and has been around since 2005.