Vodafone to add 2m FON hotspots

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Two million homespots is a small number for a company the size of Vodafone, but it shows the company’s intent for the first time, to be part of the WiFi revolution that could potentially disrupt cellular pricing.

Vodafone has this week joined FON, in a surprise move, which at least means that homespots – a commercial WiFi hotspot from a home gateway – will be incorporated into Vodafone dual mode phones.

But joining FON will only solve part of the problem, as this is only in Italy and Spain. Interestingly FON has always maintained that it will only allow one company in each country to run its software and roam with its other 14 million plus FONspots.

Despite being from Spain FON has never had a telco partner in Spain, although it has been trying hard to rope in Telefonica for some time. Telefonica has by far the most broadband lines and the highest potential for WiFi. However Vodafone has been chasing Telefonica in Spain and has 2.7 million broadband homes, now that it also has Ono.

But we assume that the FON software will only work on the 1 million that use telco gateways, many of which are fiber connected. In Italy Vodafone has only DSL and Fiber connections and that stretches to 1.7 million homes. The announcement was made in a blog on FON’s website and suggested that Vodafone will add 2 million WiFi homespot Hostpots by the end of this year.

Typically what needs to happen is that some form of authentication system must be tunneled through to the Vodafone AAA servers in preparation and then software needs to be downloaded to each of the gateways, creating a second SSID, and typically this takes 4 or 5 months. Vodafone will likely want its customers to sign some form of acceptance for joining FON. But then Vodafone has the problem of working out how to get its Ono cable broadband customers to join the fun.

In the past most FON customers have used FON service to allow fixed line customers WiFi access while they are on the road, but Vodafone, far stronger in mobile services, is likely to also enable its smartphone customers to seamlessly connect to FONspots, offloading cellular connectivity.

Germany is Vodafone’s largest broadband market by some way and there it has 3 million ADSL connections and 2 million cable, so it would have the same problem here. However it will be worse since Deutsche Telekom has the FON license in Germany, so Vodafone Germany customers won’t be able to roam with FON Homespots, unless FON changes its rules on working with only one player per country.

Technically speaking there is software (we think Alcatel is one provider) that allows most makes of cable home gateways to become Homespots. There is no real reason why an operator that has both ADSL and Cable customers cannot authenticate both types of device for FON roaming, but enable them with slightly different versions of software. In fact in Portugal NOS (was Zon) is a cable operator that uses a version of the FON software, so there is infrastructure for using cable Homespots in place. SFR in France is also a FON licensee, and having been just acquired by Numericable, will be looking at technical solutions to the same problem.

Another issue is that Deutsche Telekom has so far been a weak member of FON, since it uses an opt-in process to recruit new members rather than the usual and far more effective opt-out process. FON has little to lose in Germany by allowing Vodafone to have FON software and breaking its usual rules, and at the same time bring increasing pressure to bear on Deutsche Telekom to change its approach.

Vodafone is then placed with the problem of how to work in the UK and also in Portugal and Netherlands. BT in the UK is the largest global deployment of FON software, with over 5 million homespots, so FON will be less keen to upset BT. Vodafone has acquired broadband lines from Cable and Wireless, but right now could not challenge the BT level of homespot installations.

Meanwhile NOS the cable operator is the incumbent in Portugal and Vodafone could only add up to 300,000 broadband lines there if it made a similar move. The Netherlands is a much lower broadband number for Vodafone, but here, as in the UK, Vodafone has promised to launch a quad play, with the addition of a TV service, due soon, so could use the WiFi power a move like this would offer.

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Mr. Fellah, is a Senior Analyst and founder of Maravedis with 20-year experience in the wireless industry. He authored various landmark reports on Wi-Fi, LTE, 4G and technology trends in various industries including retail, restaurant and hospitality. He is regularly asked to speak at leading wireless and marketing events and to contribute to various influential portals and magazines such as RCR Wireless, 4G 360, Rethink Wireless, The Mobile Network, Telecom Reseller to name a few. He is a Certified Wireless Network Administrator (CWNA) and Certified Wireless Technology Specialist (CWTS).