Why a DT investment in Fon would be a smart move

If you’re a carrier having trouble coping with the onslaught of mobile data traffic, why not get a Wi-Fi provider to ease the burden? That may be the approach that Germany’s Deutsche Telekom is taking.
According to a report in the Wall Street Journal, DT is weighing a stake in Spain’s Fon, a crowdsourced Wi-Fi community in which members share with one another their home and business Wi-Fi connectivity. The Journal’s unnamed sources did not reveal the size of the potential investment, nor its timing.
Fon has been around since 2006, but its fortunes didn’t really take off until the smartphone came to prominence. Operators like BT(s bt), Softbank Mobile, Belgacom and KPN began working with Fon, tapping into its alternate network of access points to offload traffic off of 3G networks. In some cases, operators are bundling Fon Wi-Fi routers (called Foneras) with their smartphones.
If the Journal report winds up being true, this would be an interesting strategic move for DT, one that would allow it to confront the market pressures that are forcing down mobile data prices. DT runs mobile networks under the T-Mobile brand throughout Europe and the U.S., and it’s been more aggressive than most in making use of Wi-Fi (T-Mobile USA’s Bobsled app, for instance).
But if DT were able to deploy tap into the Wi-Fi networks of millions of its own customers as well as those of other Fon members (Foneros), it could start shunting substantial portions of its mobile data traffic off of its 3G and 4G networks and onto the unlicensed frequencies. Iliad’s Free Mobile has adopted just such a Wi-Fi centric strategy in France – using the Wi-Fi connections of Iliad broadband customers – and consequently its dirt-cheap voice and data plans has launched a price war among the French operators.