Communications, Internet

BT Grabs Stake in FON for Wi-Fi Ride


BT on Thursday took a stake in Spanish startup FON that gives the telecommunications giant a blast in access to Wi-Fi coverage across the UK.

The deal promises to give BT’s 3 million Total Broadband customers access at no additional charge to FON’s network of roughly 190,000 Wi-fi access points. The move gives the UK telecom company a quick jump in its public access Wi-Fi coverage at a minimal cost, Ovum analyst Mark Main said.

Google, Skype, Index Ventures, and Sequoia Capital are early investors in Madrid, Spain-based FON, which grabbed $21 million in its first round of funding. Formed in April 2006, FON is a network of private Wi-Fi access points that have agreed to join together in exchange for access to each others’ Wi-Fi hot spots.

Those contributing Wi-Fi to the FON network, dubbed FONeros, pay nothing but outside non-contributing users are charged a fee for access. The Wi-Fi startup says that is has so far brought in over 500,000 users of its service who share access to 190,000 Wi-Fi hot spots worldwide.

Financial terms of BT’s investment in FON were not disclosed.

BT already operates 12 municipal city-wide Wi-Fi access zones in the UK and a number of public access coverage areas in restaurants such as McDonald’s as well as public transportation areas dotted around the country. It also has a number of roaming agreements with other public Wi-Fi networks in the UK and abroad.

BT’s battle for Wi-Fi supremacy won’t be easy. Rivals include T-Mobile and Vodafone as well as a growing army of those from mobile network-based 3G Internet access. In recent months Hutchison 3, T-Mobile and Vodafone have all announced 3G mobile broadband services in the UK aimed at users of portable computers.

WiMAX, heavily backed by Intel Capital, is seen as another next-generation wireless access competitor, promising yet another form of wireless public access to the Internet.

 

Comments

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Madness. A ridiculous idea, when a personal wifi router will only reach to the road side - what are we going to have, a crowd of people wandering the streets of suburbia, clutching their laptops in the pouring rain to check email? There has been no practical thinking done on this idiotic venture, and its wel known that FON has only about 3500 'wifi hotspots' worldwide, not 190,000. That BT has given them money is typical of out-of-touch UK management. Amazing that this 'news' is repeated without ANY analysis or checking. FON is a collapsing company, with a BAD idea; they were voted 'Worst web 2.0 idea' last year - doesnt anyone do any research anymore?
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