Image representing iPhone as depicted in Crunc...

According to a recent report from Admob, a company bravely and so far successfully competing with Google on mobile advertising, today about 8% of requests to their servers come from WiFi networks, while the same was 3% in August. Use of WiFi from mobile devices is increasing thanks to devices like the iPhone, T-Mobile’s G1, and WiFi-enabled Blackberry phones spreading really fast.

Interestingly on iPhones 42% of requests come from WiFi, while for other WiFi phones the average is between 10-20%. According to Om Malik this is due to AT&T’s spotty 3G coverage and to the company’s efforts to offload traffic to WiFi. I believe what also plays a big role is the great job Apple did integrating WiFi on the device and the fact the OS on the iPhone forces bandwidth hungry applications to use WiFi whenever it’s available, saving huge costs to the network operators and giving users better speed and service. This proves that 3G and WiFi are more complementary than competitive and grow in tandem.

Image representing British Telecom as depicted...
Image via CrunchBase

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.

Apple iPhone 4Image by tychay via Flickr If you work for a mobile carrier anywhere in the world read this article please. The news is that the introduction of the iPhone is bringing AT&T network´s down. In the article you can see that AT&T had to stop the launch of the Blackberry Bold, an amazing new product by Blackberry because iPhone users are bandwidth hogs. Indeed in a desperate measure AT&T is promoting 3G but sending its customers who already paid for 3G to WiFi. Indeed they are forcing them to use WiFi to do such integral parts of the iPhone experience as buying music and videos from iTunes something that must be getting Apple quite pissed as without a WiFi network AT&T simply slows iTunes sales.

Even though Fon cannot disclose who we are in conversations with but I can say that this are 2 of the largest 3G carriers in the world who find themselves with this problem. Selling iPhones and having to deal with radically new data habits of the iPhone customers that require a great deal of investment in their network. The solution is to do what BT did with us at BT Fon and install the Fon functionality on millions of their DSL boxes and offer their DSL customers WiFi roaming while giving them extra bandwidth (so they are never bandwidth deprived at home) to help create WiFi coverage everywhere they can build a national WiFi network for 99% less than a national 3G network. Moreover DSL operators who work with Fon are finding that by building a network with us they can launch their own dual 3G WiFi handsets including UMA, they have customers who churn less cause they pay at home and get free roaming everywhere, and they do better than the competitors who do not work with us because with their competitors customers pay at home and get WiFi at home but with us they pay at home and get WiFi in tons of places.

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