MobileCrunch reports about AT&T buying Wayport, a WiFi operator with around 3k hotspots in the US, for $275 Million. Fon has 300k Fonspots. We are 100 times larger and we grow a Wayport every week (although to be fair there is probably a 10 to 1 ratio in value of the their hotspots as they are strategically located and ours are where foneros are). This move from AT&T confirms the carrier’s interest for WiFi as a way to offload traffic from their expensive 3G network. At Fon we have been arguing that mobile operators will soon realize that the economics of sending movies, video, tv, music and games do not work out for 3G networks as ideal as they are for voice and light data.
Demand for ubiquitous Internet access is growing rapidly with the proliferation of devices like iPhones, Blackberry phones, Android phones and small and inexpensive laptops like the ASUS EeePC or MSI Wind. All these devices come with built in WiFi support and surprisingly mobile operators are supporting it, since even though they make money with 3G data connections they want to keep data intensive application off their expensive mobile networks and WiFi is the best way to offer fast broadband access at a low cost. Apple and AT&T already built WiFi support into the iPhone in a way that drives or forces users to use cheap WiFi instead of expensive 3G for any data intensive application, be it music downloads, VoIP or video streaming with Youtube.
At Fon we are still losing money but losses are coming down fast from 1.2 million euros in October of 2007 to 310K euros in October of 2008 to do a month to month comparison. More and more Fon members or Foneros as we call them are enjoying the benefits of a network that is absolutely free for them for occasionally contributing 20% of their bandwidth to others. Moreover many foneros are making money with Fon selling passes to non Fon members. And Fon keeps signing up Telecom partners who see Fon as an effective tool to lower churn and lower customer acquisition costs. British Telecom is one such happy partner.
In any case as an entrepreneur in a company that is still subsidizing the Fonero movement and in times of tremendous financial upheaval it makes me happy to see that AT&T the most valuable Telco in the world has clearly seen tremendous value in WiFi and gone for Wayport. I also want to congratulate the folks at Wayport for building such a worthwhile company.
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