Deutsche Telekom partners with Fon for free wifi hotspots in Germany

Deutsche Telekom announced that it would start working with Fon in Germany. This means that, starting this summer, Deutsche Telekom customers obtain access to the “millions” of hotspots worldwide (Fon doesn’t specify how many millions).

Recently, the WSJ reported that Deutsche Telekom would soon take a participation in Fon, adding that a letter of intent was already signed. There was no news on this today. It’s also not clear whether this partnership is the first step towards a participation.

Fon, founded by Martin Varsavsky in 2006, is a network of ‘free’ Wifi hotspots. Broadband consumers can open a slice of their home wifi (shielded from their private network) to other ‘Fonera’s’. In return, they can surf Fon hotspots all around the world for free.

People who don’t open up a Fon hotspot at home can also access Fon hotspots, but they have to pay a fee. This way, Fon is a “free” hotspot system without any ‘free riders’, as Martin Varsavsky explained  in an interview with Whiteboard:

“When you first look at Fon, you tend to think of it as peer-to-peer wifi. And just like peer-to-peer music destroyed the music industry, you’d think that Fon will destroy the telecoms. That’s the first take that people have.

But the reality is much more complex. First of all, you’re always paying somebody when you use Fon. From the beginning, the idea was: share wifi at home, and roam the world for free.  But the only way to share your home wifi is to pay a telco for a DSL connection, right? People who don’t share a broadband connection at home have to pay FON to connect. In this sense, Fon is not like peer-to-peer music piracy. There are never any free riders on Fon. And therefore, it’s not a threat to the telco’s.

We disovered that on the contrary, Fon is beneficial to the telco’s. Because Fonera’s are less likely to change providers. Even if consumers are seldom home, they keep their DSL connection, because their home connection enables them to connect to free hotspots when he’s on the road. Before Fon, this kind of customer would just cancel his DSL connection. All of this is  not obvious to the consumer, but it is clear to the telco’s that we increase the amount of connections and lower the churn.

Another issue is cost. It’s 90 percent cheaper to send a gigabyte of traffic over a landline than to send it over the mobile network. And the mobile networks are saturated anyway. So the telco’s actually prefer people to offload all that smartphone traffic to fixed connections.”

[Netzwertig][photo: Fon]

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Raf Weverbergh

Editor of whiteboard. Raf Weverbergh was a magazine journalist whose work appeared in magazines like Rolling Stone, Playboy, Mail on Sunday, Publico and South China Morning Post. He is the co-founder of FINN, a corporate communications agency where he advises startups and multinationals on their PR and Mustr, the easiest media database for PR professionals. You can contact him on Twitter, Linkedin or Skype (rafweverbergh).

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