BT to Invest in FON?
FON, the Spanish share-your-Wi-Fi services company, is close to announcing a new round of funding that could total to as much as 10 million Euros (shade over $13 million.) — While some of its existing investors - Index Ventures, Skype and Google …
Context & Ripple Effects
A year ago, FON was a bet by web-era money: Martin Varsavsky's Wi-Fi-sharing startup won backing from Google and Skype in February 2006 on the idea that members share their home broadband in exchange for roaming access everywhere else.
Today's report reframes that cap table. GigaOM hears FON is close to a new round of up to €10 million (just over $13 million), with existing investors Index Ventures, Skype and Google expected back — and, unconfirmed so far, BT considering a stake. A UK incumbent carrier inside a peer-to-peer Wi-Fi network would mark a shift from FON as a consumer-Internet curiosity to FON as potential telco infrastructure.
First-order effects
- If the BT investment lands, FON gains its first major incumbent-carrier backer and a plausible route into the UK broadband market; Index Ventures, Skype and Google would be doubling down rather than exiting their 2006 position.
- For BT itself, the rumored stake is a cheap option on community Wi-Fi: access to a shared-router footprint without building hotspot infrastructure of its own.
Second-order effects
- Other European ISPs would have to decide whether subscriber Wi-Fi sharing is a threat to metered revenue or a free network extension — pressuring them toward either comparable sharing schemes or contract terms restricting residential router sharing.
- A carrier-branded FON community would put pressure on paid hotspot operators (airports, cafés, hotels), whose per-session pricing competes directly with free member-to-member roaming.
Third-order effects
- If incumbents start funding rather than fighting shared-Wi-Fi networks, broadband competition shifts from raw bandwidth sold per household to aggregate hotspot footprint across a member base — turning customers' home routers into carrier edge infrastructure.
- It also signals venture capital treating telcos as late-stage strategic co-investors for consumer-network startups, a pattern that could shape how the next generation of connectivity startups is financed.
The trend: European carriers are moving from viewing consumer Wi-Fi sharing as a threat to buying stakes in it as a low-cost way to extend their networks beyond the home hub.