Google and Skype join new wi-fi venture

Google, internet voice-call company Skype and leading venture capitalists have invested in a new user-run network of wi-fi hotspots, which they hope will become the biggest in the world by the end of the year.

Google, Skype, Index Ventures and Sequoia Capital will announce on Monday $21.7m (€18m) in first-round funding for Madrid-based Fon to build on its growing global band of “foneros”.

Foneros are users of the service and known as either “Bill”, “Linus” or “Alien”. Bill members – after Bill Gates – download secure software from Fon that turns their home wi-fi network into a hotspot anyone within its range can use to connect to the internet for a fee.

Linus members – after Linus Torvalds, creator of the free Linux software – allow their hotspots and bandwidth to be shared for free and can use any other members’ without charge.

Aliens pay to connect to the Fon network and do not share their own networks. Fon and Bills will share the revenues earned from Aliens and other Bills.

The service went live in November and has registered 3,000 users in 53 countries in two months. Fon says it is growing faster than T-Mobile, the biggest network, with 24,000 hotspots established over four years, and expects to exceed this as word spreads.

“We think this is very disruptive technology and it’s going to be global, very much like Skype,” said Danny Rimer of Index Ventures. “It’s another example of an incredibly innovative company coming out of Europe.”

Internet service providers may object to their subscribers reselling the bandwidth being provided to them but Fon says some have already signed up as partners and can earn a share of Alien revenues from the venture.

The company was founded by Martin Varsavsky, who previously formed Ya.com and Jazztel, respectively the second-largest internet and publicly traded telecoms companies in Spain.