FON's hotspot rash continues to spread

Ian Scales
By Ian Scales

Jan 21, 2014

In the round FON has raised US$14 million to push its network further in the US where it’s thus far been least successful. Its backers include Index Ventures, Google, Coral, Atomico and Deutsche Telekom and a new contribution by Qualcomm Atheros, which is helping FON develop a WiFi router that combines what FON now calls ‘social WiFi’ (its old buzz-word was ‘crowdsourced’) and music. We’ll have to wait and see what the music feature involves.

FON’s business model is built around the shared WiFi concept. Participants devote a sliver of their WiFi bandwidth to the FON pool and in return can use all the other slivers on a global basis. The company has often worked with wireline incumbents - such as BT in the UK - to push out its shared network. Deutsche Telekom is also an enthusiastic backer.

As well as take a stake, Qualcomm Atheros has been working with FON on embedding the FON functionality in its WiFi hub chipset (as Qualcomm’s customers do - it is essentially a design house for silicon) and as part of that deal the design is made available to other customers via Qualcomm’s SDK so they can embed it as well, thus furthering the cause.

In this era of multi-billion dollar deals being done (it seems) on an almost daily basis in this market, FON’s $14 million might seem like an underwhelming total for what’s being billed by some as a game-changer.

According to FON’s CEO, Martin Varsavsky, “The amount of this round and the caliber of investors will propel us into our next stage of growth."

So the money is only part of the story. FON needs to keep up its visibility as it grinds towards whatever number of hotspots it reckons will finally give it blanket enough coverage to really make a difference in the world. The Qualcomm deal in particular keeps it in the industry spotlight.

FON’s stated target is to have 35 million hotspots globally by 2016; it currently has 12 million and has grown by 50 per cent (it claims) in the past year, which at that rate puts it on target for around 35 million by the middle of 2016.

Coverage is uneven. In a long relationship with BT (the only big Euro wireline incumbent without a mobile arm) it has built up penetration to around 10 per cent of households (including mine). It claims France and Belgium are similar, but it admits that coverage can be uneven.

My own experience (and the map on Fon website) tells me that my town is covered in hotspots,. My computer’s WiFi settings tell me that two of those are in range, but the only time I’ve ever used FON was when my own service went down. Then it was highly useful.

We know how many (roughly) users FON has because it has 12 million hotspots, but what we don’t know is how many minutes per year each of those users (on average) uses. That WOULD be interesting.

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