How does Fongo make money?

By   |   Verified by Andrew Boyd   |   Published 10th November 2021

  • Fongo provides Canadians low-cost personal and small business telecom solutions.
  • Get the breakdown of Fongo’s business model.
  • Review Fongo’s competitors and their growth plan for the future.

Fongo is a mobile app that facilitates easy, personal, and low-cost communication for small businesses. With Fongo, you no longer have to pay $100 in telecom bills every month. Based out of Ontario, this no-cost mobile app only caters to Canadians.

What follows is a guide to how they make money.

What does Fongo do?

Fongo offers a variety of zero-cost, no-contract, and low-cost mobile services across four categories: Fongo Mobile, Fongo Works, Fongo Home, and Fongo Internet. All services offered by Fongo include free Canada-wide calling. The app has several free features including call waiting, caller ID, call forwarding, and 911 service.

With Fongo, you can enjoy worldwide calls at low rates, free voicemails and call display, and unlimited texts and picture messages. However, you do need to have WiFi coverage to enjoy the aforementioned services. While some of these services are free, some come with minimal charges.

How does Fongo work?

Fongo offers a number of services.

Fongo Mobile

Fongo Mobile uses IP telephony or Voice over Internet Protocol (VoIP) for calling and texting using your WiFi connection, Fongo Internet, or existing data plan. Like traditional telecom providers, Fongo gives you a real phone number. You can choose a phone number in the local area of your choice so anyone located in that area can cal you for free.

Fongo Home Phone

The Fongo Home Phone service extends to all 10 provinces of Canada. Subscribers can receive free calls from all over the world while keeping your existing phone number. (Optionally, you can get a new number from Fongo.) In addition to Canada-wide free calls, Fongo Home Phone comes with free unlimited calls to the United States.

Fongo Works

Fongo Works is a cloud-based mobile solution for small businesses. Fongo Works is a paid service that comes with a phone system that can be customized according to your business’s unique requirements. Popular features include voicemail forwarding to your email address, automated receptionist, and conferencing for up to 10. Fongo Works is available for free.

Fongo Internet

Fongo Internet is a high-speed, home-based internet service with unlimited data. Your location decides whether you qualify for a DSL connection or cable connection. You can even use your own modem for Fongo Internet provided that the modem is compatible with the internet service. Please note that this service is only available in Ontario and Quebec.

How Fongo makes money

Fongo makes money using a freemium model, offering both free and paid access to their services. While most of its revenue is generated through paid subscriptions, it also makes money from in-app advertising placements.

Advertising

While many services offered by Fongo are free, some do cost. However, almost all paid services offered by Fongo come with free trials. When you use a free service offered by Fongo, you have an ad banner located within your Fongo app, which generates revenue on a cost per impression (CPM) model. Ads are generally unobtrusive.

With every free service, Fongo has some paid features. Fongo sells World Credits to allow calls outside of Canada, SMS plans, and internet service to make money. The more users they sign up on a free tier, the more they can convert into paying customers over time.

Future growth engine

There are a large number of mobile apps in the market that provide free phone services. However, most Canadians seem to prefer simple and seamless phone service.

Fongo’s current business model relies on providing an alternative to telecom networks to cut down the phone bills of its customers. Fongo may expand its cloud-based business phone system by offering additional small business-oriented solutions.

Competitors

Some of Fongo's most prominent competitors include business conferencing platforms, business phone systems, telecommunication networks, and other business-related apps and softwares.

  • GoToConnect (formerly Jive)
  • GlobalMeet Collaboration
  • CallRail
  • Aircall
  • DialPad Talk
  • RingCentral MVP
  • Nextiva
  • 3CX
  • OpenPhone

All the aforementioned apps use Voice over Internet Protocol (VoIP) to provide unique business solutions. Fongo has an edge over its competitors because of its extensive range of services. However, Fongo has not been widely embraced by Candians which is partly attributable to the long-established habit of Canadians to use traditional telecom providers.

Fongo also faces competition from tech companies like Apple, which ships FaceTime with every iPhone and computer, as well as Facebook, owners of the popular Facebook Messenger and Whatsapp services.