MWC2015 Highlights: Partnerships, big data and 5G

Ovum analysts
06 Mar 2015
00:00
News
Commentary

Mark Zuckerberg advocates operator partnerships to help connect more people to the Internet

Paul Lambert, Analyst, Service Providers and Markets

Facebook CEO Mark Zuckerberg used his keynote speech at MWC 2015 to make the case for why operators should work with the social networking giant to connect more users in developing markets to the internet. His plan is to use the Facebook-backed Internet.org initiative to provide a low-cost way for a wide base of users to access basic, non-data-heavy internet services such as a text-only version of Facebook.

Although it is clear that the cost of services is a major barrier to a broad segment of users’ ability to access the mobile internet, especially in developing markets, Zuckerberg must convince operators that Internet.org represents the best way to connect them. Operators will question whether they can gain more by partnering with Facebook to provide free or low-cost access to a range of popular services or simply by pricing and marketing their services in ways that resonate with low-ARPU customers.

Zuckerberg’s case rests on the argument that Internet.org’s business model will be lucrative for operators because it leads to paid-for data usage. He argued that in the Philippines “the number of people using Internet data has doubled” as a result of Internet.org services and that in Paraguay the number of mobile data users grew by 30% during a free trial of Facebook. Zuckerberg said that Internet.org hopes to add three to five new markets to its existing list of operator partners, including Millicom (Tigo) in Latin America, Airtel in India, and XL Axiata in Indonesia.

As Zuckerberg seeks to make the case that Internet.org is more successful at increasing data traffic than operators’ own initiatives, he should be applauded for drawing operators’ attention to the question of how they can best connect the remaining base of users that still do not access the Internet.

At the same time, Zuckerberg’s proposition goes to the heart of a major question facing operators: where do they sit in the digital service value chain and in what ways do they need to partner to take advantage of the new opportunities it offers? Whether Facebook can prove that it has operators’ best interests at heart will largely depend on how successful Internet.org compared to operators’ own strategies to connect the unconnected.

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