diff --git a/packages/image/install b/packages/image/install
index 9d8936cdb6..9e609950a9 100755
--- a/packages/image/install
+++ b/packages/image/install
@@ -81,9 +81,6 @@ case "$2" in
     [ "$COREBOOT" = yes ] && $SCRIPTS/install flashrom
     [ "$COREBOOT" = yes ] && $SCRIPTS/install getpir
 
-# setting up hostname
-    echo "127.0.0.1 mobile.openelec.tv localhost" > $INSTALL/etc/hosts
-
 # setting
     echo $TARGET_VERSION > $INSTALL/etc/release
 
diff --git a/packages/sysutils/busybox/install b/packages/sysutils/busybox/install
index dab893c81e..f33556830d 100755
--- a/packages/sysutils/busybox/install
+++ b/packages/sysutils/busybox/install
@@ -22,6 +22,7 @@ ROOT_PWD="`$ROOT/$TOOLCHAIN/bin/cryptpw $ROOT_PASSWORD`"
     cp $PKG_DIR/config/sysconfig $INSTALL/etc
     touch $INSTALL/etc/fstab
     ln -sf /var/run/resolv.conf $INSTALL/etc/resolv.conf
+    ln -sf /var/run/hosts $INSTALL/etc/hosts
 
   echo $GREATING0 >  $INSTALL/etc/issue
   echo $GREATING1 >> $INSTALL/etc/issue
diff --git a/packages/sysutils/busybox/scripts/init b/packages/sysutils/busybox/scripts/init
index f9d05397ec..e03b2f12c9 100755
--- a/packages/sysutils/busybox/scripts/init
+++ b/packages/sysutils/busybox/scripts/init
@@ -3,6 +3,8 @@
 # read config
   . /etc/sysconfig
 
+HOSTNAME="openelec"
+
 # mounting needed filesystems
   /bin/mount -n -t ramfs none /var
 
@@ -14,6 +16,12 @@
   install -m 1777 -d /var/tmp
   install -m 755 -d /var/run/sepermit # for LinuxPAM
 
+# bring lo up, whether we have network card or not
+  ifconfig lo 127.0.0.1 up
+
+# create /etc/hosts file, useful for gethostbyname(localhost)
+  echo -e "127.0.0.1\tlocalhost $HOSTNAME" > /var/run/hosts
+
 # starting Xorg
   [ ! "$TEXTMODE" = "yes" ] && start_xorg