AT&T, Fon Sign Roaming Deal
AT&T and Fon, the Spain-based network of user-contributed Wi-Fi hotspots, now have a Wi-Fi network roaming agreement that allows users of Fon and some AT&T customers Wi-Fi access privileges on both networks.
AT&T customers can download the WiFi International App will gain access to hundreds of thousands of FonSpots internationally.
The AT&T Wi-Fi International App, which is available on iPhone, iPad and Android devices, lets AT&T customers on either the 300 MB ($60 a month) or 800MB ($120 a month) “AT&T Data Global Add-On” package access up to 1 GB of Wi-Fi each month at no additional charge.
Fon members will gain access to AT&T’s Wi-Fi network, including more than 30,000 hotspots at restaurants, hotels, bookstores and retailers throughout the United States.
An observer might be tempted to guess that Fon users will derive more value from the agreement than will AT&T users, for a couple of reasons, beginning with charging models.
Foneros have a couple of ways to gain access to other Fon hotspots, but the cost is free to low. That will not be the case for AT&T customers, who will spend at least $60 a month, and up to $120 a month, to gain access to Fon hotspots in countries where Fon operates.
Those partners include Belgacom (Belgium), BT (UK), Deutsche Telekom (Germany), Hrvatski Telekom (Croatia), KPN (Netherlands), MTC (Russia), Netia (Poland), Oi (Brazil), SFR (France), Softbank (Japan) and ZON (Portugal).
Still, the roaming deal is likely to be most valuable to a rather small but important subset of AT&T users, namely those who travel to Fon-served areas, especially business users.
The important nuance about Wi-Fi hotspot use is that the overwhelming percentage of smart phone Wi-Fi use happens on private hotspots, not public hotspots, even though, with very few exceptions, such as Japan, users in most developed countries consume well over 80 percent, and often over 90 percent, of their total mobile data on Wi-Fi networks.
According to researchers at Juniper Research, almost half of all mobile data traffic will be offloaded to Wi-Fi and other local networks in 2013.
The bigger question is how much "out and about" usage might be shifted to Wi-Fi.
NTT in Japan has tested the offload potential of dense Wi-Fi deployments and apparently has concluded that less than 25 percent of mobile data traffic can be offloaded to public Wi-Fi in the long term.
On the other hand, Mobidia already estimates a majority of total smart phone data usage occurs on Wi-Fi, for all of the top-four U.S. mobile operators, with AT&T having the largest percentage of Wi-Fi use, compared to mobile data.
So though Wi-Fi networks consistently accounted for well over 90 percent of the Wi-Fi traffic, according to Mobidia, perhaps three percent of that traffic used a public hotspot.
In other words, use of managed, public hotspots, as would be offered by Wi-Fi network providers (such as Fon) or mobile operators (such as AT&T), consistently accounts for very little traffic across all countries analyzed by Mobidia.
People make use of at-home and at-work connections, mostly. Even when traveling, it is likely most people will be using hotel or other residence-based Wi-Fi for the great bulk of their data consumption.
Still, the value of public hotspot access could be very high for some AT&T users.
The deal also illustrates the Wi-Fi revenue model and value, for a firm such as AT&T. Access to the Fon network requires that mobile users purchase an extra international data service costing $60 a month or $120 a month.
The use of the Fon hotspots provides value by allowing users to offload up to 1 Gb, each month they are roaming, but the revenue is driven by the need to buy the extra international roaming feature.