BT links up with FON for "people's" Wi-Fi network

By Kirstin Ridley

LONDON (Reuters) - BT Group on Thursday teamed up with Wi-Fi crusader FON in a deal to allow more than three million broadband customers to use hundreds of thousands of hotspots for free.

Stepping up competition for customers in Britain's broadband market, BT said it had taken a stake in FON -- joining investors including Internet search engine Google and online auction leader eBay -- to create "the world's largest Wi-Fi community".

BT's retail customers who agree to share a small portion of their home broadband connections by opening up a separate, secure channel on their wireless router with one click of the mouse, would join a global community of people already surfing over "a people's network" of high-speed Internet connections, BT said.

"I think it will be a major growth area for us and lead to several tens if not hundreds of thousands of customers opting in," Gavin Patterson, the managing director of BT Group's Consumer arm, told a journalist conference call.

With what has become a company motto: "you pay at home and roam the world for free", Argentine entrepreneur Martin Varsavsky, who founded Spanish-based FON in February 2006, said FON was already the largest Wi-Fi network in Japan and Germany.

Varsavsky, who has also signed up Russian conglomerate AFK Sistema and France's second largest fixed-line telecoms operator Neuf Cegetel, said his target of hitting one million customers by the end of 2008 was "very reasonable".

"For people who like music, movies, videos, games ... Wi-Fi is becoming huge -- and because the gadget makers love Wi-Fi," he said.

At launch, new BT members will be part of a community of 500,000 members and will have access to more than 190,000 FON hotspots worldwide.