KPN slips out 250,000 Homespots using FON software

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A small but highly relevant story slipped us by last week, as the incumbent telco in the Netherlands, KPN, began shipping its FON WiFi network in the Netherlands, announcing that it already had 250,000 hotspots ready now, with 1 million expected by year end.

We have pointed out that not only is KPN a basket case financially in terms of European telcos, with America Movil already having had a run at buying it this year, but also with the combined might of Liberty Global’s Netherlands UPC subsidiary, if combined with the dominant Ziggo cable platform, it is vulnerable to having its services undermined by WiFi First cellular services, built around Vodafone cellular delivery and 1.5 million WiFi hotspots from the two cable suppliers.

If Ziggo and UPC do merge then they will have a dominant broadband market share, leaving KPN behind. So it is vital that the lines that KPN does have are converted into Homespots as fast as possible, so that they can be used for seamless WiFi offload, giving it the same kind of economics as the two cable players.

KPN was one of the cellular operators in Europe that has suffered most at the hands of local OTT services, ripping the heart out of its SMS revenues, and more recently its voice revenues. So whatever it does, KPN’s business will be further undermined, but it can choose – should it launch its own WiFi First services, or just let the cable firms take away its customers?

It’s not a pretty choice but the relationship with FON makes it possible for KPN to counter strike at least with its own WiFi. The FON services will allow for existing KPN customers to get free internet access at thousands of hotspots in the country and about 13 million others worldwide in France, Belgium, Japan, Portugal and United Kingdom and shortly it is likely to add those at Deutsche Telekom in Germany and AT&T in the US.

The Netherlands is likely to have something like 50 WiFi APs per square kilometer across the entire country and more like 120 in cities, and that’s sufficient coverage that virtually all mobile data could be delivered over WiFi. however for that to work properly there would need to be a roaming agreement between the cable WiFi and KPN’s and we suspect that this is never going to happen.