Fon, the crowdsourced wi-fi hotspot provider that uses technology allowing people to securely share their home broadband connections, has announced a partnership with German telco Deutsche Telekom to build what it’s calling the country’s largest wi-fi hotspot network. The joint network will launch in the summer, under the not exactly catchy name ‘WLAN TO GO’.
DT has 12 million broadband subscribers and more than 12,000 existing Wi-Fi hotspots across German. Commenting on the partnership in a statement, Rene Obermann, outgoing CEO of DT, said: “By 2016, we want to provide nationwide WLAN TO GO at more than 2.5 million additional hotspots.”
Fon has more than 7 million hotspots in more than 100 countries. The company, which was founded back in 2006, has raised more than €45 million to date. CEO and founder, Martin Varsavsky, told TechCrunch Fon has been cash-flow positive for three years. Fon’s network sees 3.5 million unique users per day, according to a spokeswoman.
Despite rumours, reported earlier this year in the WSJ, that DT might be considering taking a stake in Fon, Varsavsky said Fon is not looking to raise any more money at present. “We’re well funded,” he said.
Fon’s biggest market for usage is Japan, according to Varsavsky, while its largest hotspot footprint is in the U.K., where it partners with telco BT — also an investor — to offer a network of more than four million wi-fi hotspots. Other investors in Fon include Index Ventures, Google, Sequoia Capital, Skype, 3, Coral Capital Management, Allen & Company, Google and Atomico, according to CrunchBase.
Fon’s technology enables broadband users to share their connection by splitting it into two Wi-Fi signals — one that is private and encrypted for their own use, and the other a public but password protected Wi-Fi signal for use by Fon members. Fon then sells access to its wi-fi hotspot network to carriers, who bundle it with mobile device tariffs, and to ISPs who can also offer a Fon service. Bundling free wi-fi hotspots with tariffs is one way for carriers and ISPs to differentiate their offerings.
In Deutsche Telekom’s case, the telco’s broadband subscribers will need to sign up to the Fon service and share the unused capacity of their Internet connection with other users in order to gain free access to Fon’s global hotspot network.
Varsavsky said Fon’s next focus for network expansion will be additional markets in Europe (DT has subsidiaries in various European countries, including Croatia, Greece and Slovakia — which could be one way for Fon to continue expanding its European footprint). In January, Varsavsky announced the company had entered a deal with Dutch telco KPN, which has some 2.5 million broadband subscribers, to build out a network in the Netherlands — due to go live in the second half of this year.
Although Fon has hotspots in more than 100 countries globally, the vast majority (90 per cent) are located in the following seven countries: UK, Portugal, France, Belgium, Russia, Brazil and Japan, according to COO Alexander Puregger, speaking to TechCrunch last month.