Thu, Jun 08, 2006 - Page 12 News List

Accton, Fon SA forming joint venture for WiFi

By Jessie Ho  /  STAFF REPORTER

Network-equipment maker Accton Technology Corp (智邦科技) yesterday announced it would form a joint venture with Madrid-based Fon SA, a community WiFi developer, to produce a WiFi-sharing service for the local market.

Fon was established last November with the idea of sharing broadband connections through wireless routers to form a global community. Its investors include Google and Skype Technologies SA.

To become a member of Fon, or a "Fonero," users with broadband access need to register with Fon online and download dedicated software onto their WiFi routers. They can then get free access throughout the community wherever there is coverage.

The high-speed and free Internet access has attracted more than 40,000 users in 144 countries within five months, making Fon the world's largest WiFi community, Martin Varsavsky, founder and CEO of Fon, said at a press conference in Taipei yesterday.

"After converting home-WiFis into hotspots to provide access for all WiFi devices, Fon could facilitate transmission of pictures, music, video clips and even games, a capacity that 3G [third-generation] telecommunications cannot achieve," Varsavsky said.

Fon plans to boost the number of its users to 1 million by the end of next year, with Taiwan making up 3 to 5 percent of subscribers, said Huang An-jie (黃安捷), Accton's chief executive officer.

Accton, which unveiled the first Skype-enabled Wi-Fi phone last November, is the first company in Asia to work with Fon, Huang said.

The joint venture, which will be established in late August, will be responsible for Fon's community building, marketing, sales, business development with Internet Service Providers, portals and information technology companies, Huang said.

He refused to reveal the proposed investment amount.

Through the partnership, Accton will also manufacture WiFi routers that are Fon software compatible. Fon has been getting its routers from Linksys Group Inc, a division of Cisco Systems Inc. But now Accton will be the main supplier of the routers, as Accton's products cost 40 percent less, Varsavsky told the Taipei Times.

To promote the service here, Fon plans to provide about 5,000 routers to local users for free as it did in Germany, Varsavsky said.

The routers are usually sold for about US$20 each in other other countries, but the price in Taiwan has not been set yet, he said.

In elaborating Fon's business model, Varsavsky described Fon players as belonging to one of three categories: Linus, Bills and Aliens. As a Linus, the user agrees to share bandwidth to others. As a Bill, the user sells bandwidth and gets 50 percent of the revenue generated by Aliens, people do not join Fon but who pay to use the connection online.

Fon ties the charge to Aliens to the bus fare in local markets, Varsavsky said. For example, the charge in Europe is about 4 euros per 24 hours, which is very affordable, he said.

Even though Fon's business model has been copied in China, Varsavsky said he will not give up the market.

"Fon is open-source and can be easily copied ? We are very convinced that people will join a bigger network, not small ones," he said.

WiFi-sharing poses a tremendous opportunity for Taiwanese manufacturers, who

could develop related products such as WiFi radio, game consoles, digital

cameras, digital music players and a slew of products to meet demand,

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