BT buys into the FON WiFi network

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The UK’s top fixed-line telco, British Telecom, has partnered with with Wi-Fi startup FON which will allow its three million UK broadband customers to roam across eachother’s WiFi hotspots, and those of FON users across the planet.

As part of the deal BT has also taken a stake in FON, which already counts Google, eBay, Sequoia Capital and Index Ventures among its investors, in a bid to create “the world’s largest Wi-Fi community”. Argentine entrepreneur Martin Varsavsky (who also blogged the announcement), founded Spanish-based FON in February 2006, and it has signed up telcos including Russian conglomerate AFK Sistema and France’s second largest fixed-line telecoms operator Neuf Cegetel.

BT members will now be part of a community of 500,000 members and will have access to more than 190,000 FON hotspots worldwide. BT’s ‘Total Broadband’ retail customers will also be able to use its existing 7,000 Wi-Fi hotspot network and its 12 “Wireless Cities” around the UK. Crucially, BT’s WiFi boxes (such as the BT Home Hub) can be used for FON, so it’s no longer necessary to get a physical FON device, as in the past.

That’s nice, but it must be pointed out that customers need to opt in to the scheme to share a small portion of their home broadband connection first. So the network doesn’t actually exist right now – it still needs BT’s marketing muscle. And although it’s a relative no-brainer – opt in and you get free wireless elsewhere – I can’t see all three million of BT’s customers suddenly signing up and sticking their WiFi box out the window.

And BT clearly isn’t just doing this for fun.

This essentially a customer acquisition, retention and defensive strategy. Being able to pay for broadband at home, but getting access to what is in effect ‘free’ wireless outside the houses of other BT customers in the UK – and other FON subscribers around the planet – is a good sales story. Plus it’s a reason to stay with BT, which is struggling to launch other customer retention services like it’s IPTV play BT Vision.

The ‘defensive’ bit is perhaps as much about attack. With mobile data usage rising, consumers – especially geek types, it must be said – are experimenting with things like VOIP and Skype on the mobile. If BTs customers can roam across the UK both with a WiFi laptop AND, say, IP-enabled mobile handset, BT will be in a position to add a mobile data feather to its cap.

  • James Heaver

    So in the late 00s BT could launch a service which failed miserably 15 years earlier (Rabbit and other CT2 services).

    Also, at the same time as the internet is being harnessed for proper use on mobile phones (iphone and affordable 3G packages etc) voice could start moving away from the mobile phone networks.

    Its an interesting world.

  • Sam Judson

    BT Fusion is their mobile/in-home phone package. BT Vision is I believe the IPTV package you are referring to.

  • Luke Dicken

    This is a great opportunity depending on how BT try to implement it at the consumer level. FON is an interesting system, and it would be nice to have the opportunity to get away from the costs associated with alternative wireless roaming solutions.

    One issue I can see though is that given that BT has some fairly restrictive capping in place on usage, how many customers who are in the know are going to be willing to open up their connection and let others have the potential to abuse it?

  • Mike Butcher

    Sam- whoops, thanks.

  • TechCrunch en français » [fr] L'accord FON-BT est une bonne nouvelle: enfin presque

    […] cet accord. Du côté FON l’accès au parc des clients de BT n’est pas immédiat (comme l’explique justement Mike Butcher de Techcrunch UK). L’accès est disponible en option et il faudra mettre en […]

  • James Heaver

    Roaming use will be limited to 512kb/s and won’t coutn towards usage caps.

  • Mike

    In this day of security risks, who on earth is going to share their WiFi, or have to travel to a specific address and lurk outside (= you must have a car in the UK weather/street security environment) whern mobile data can be had *anywhere* for a few quid per GB? That’s a really big security and physical risk to take for a pretty minimal gain.

    The FON routers have 2 separate Wifi radios, but my Homehub does not. Therefore you are relying on sharing a sub-domain or suchlike, which must be a hackable solution.

    This will not fly.

  • Gonzalo Zavala

    It could be the right time to launch this given that all future iphone owners (potentially a lot) will be hungry for wifi networks, given iphone current lack of 3G.
    It’s difficult to imagine someone walking around neighborhoods with an open laptop looking for signal, but not that difficult to see iphone users casually browsing the internet/checking for emails in the street.

  • James Vinall

    FON and BT still require their customers to buy a WiFi transceiver to create their own WiFi “hotspot” and in return get free access in other areas where people have installed FON transceivers. Neighbours within range of the FON customer WiFi transceiver can piggy back access by registering with BT and paying for ISP services.

    The FON “hotspot” model does not allow seamless roving WiFi access across populated areas and does not provide free WiFi access for digital cities.

    This is just getting individuals to buy wireless for their home, where they need to pay for the radio set and allowing others within range to use it to enrich BT and FOn.

    What is needed is a new business model to get someone other than users to pay for WiFi/WiMax transceiver deployment and provide free access in populated areas and along transportation routes.

  • TechCrunch UK » Blog Archive » Supersize Wi-Fi with your McDonald’s burger?

    […] But that will cost them between £35-£55 a month for voice and data use. And last week BT took a stake in Spanish WiFi startup FON to allow its three million Total Broadband customers to roam across […]

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