Features and Analysis

MWC: Facebook’s Zuckerberg launches charm offensive at service providers

Facebook founder and CEO Mark Zuckerberg launched a charm offensive aimed at mobile operators yesterday in Barcelona, but if the comments made earlier this morning by service provider chief executives at Mobile World Congress are anything to go by, it’s unlikely he will have won over any new friends.

In his keynote session which concluded Day One of the conference, Zuckerberg started off by praising the operators for bringing connectivity to the world’s population:

“Operators are leading the charge to connect everybody. They’re doing all the work, building the towers, laying down the fiber.”

Zuckerberg was in Barcelona to talk about internet.org, the Facebook-sponsored project to connect the world to the Internet by providing some basic services for free. In the space of the last 12 months, this initiative has launched in six countries – Columbia, India and four countries in Africa – and according to Zuckerberg, it will help service providers attract new subscribers by opening up the world of data to people who have never experienced the Internet:

“We are looking to create a model that’s profitable for operators, that is on perpetually as more people get exposed to Internet, and more people are upgrading to paid data than will be using free services.”

In this, Zuckerberg was backed up in the panel discussion that followed by Millicom’s senior vice president of operations Mario Zanotti, who said that since partnering with internet.org, there has been a 30 percent increase in customers paying for data in Paraguay at Millicom’s Tigo and a tenfold increase in smartphone sales in Tanzania.

Injecting the only dissenting note in the Facebook/operator “love-in” panel, Telenor CEO Jon Fredrik Baksaas raised the subject of Facebook’s purchase last year of WhatsApp and how that was eating into his company’s SMS revenues, describing it as a “point of contention between Facebook and the operators.”

OTT cannibalization

Earlier in the day, other service provider chiefs were more vehement in expressing their feelings that Facebook and other over-the-top (OTT) players were cannibalizing their business model through the free services they offer that rely on the operators’ network to provide them.

Telefónica’s executive chairman and chief executive officer César Alierta got the ball rolling, arguing that service providers were at a disadvantage when competing with OTT players due to the regulation they face. Given the network investments they make and the jobs they create, operators deserve what Alierta called a “balanced scenario” with all the players in the ecosystem.

Vodafone chief executive Vittorio Colao meanwhile said there should be a “harmonization of rules” while Deutsche Telekom’s Chief Executive Tim Höttges explicitly called for OTT players like Google and Facebook to be regulated since they offer communications services much as service providers do.

“There is a convergence between over-the-top web companies and classic telcos. We need one level regulatory environment for us all.”

For these operators, Zuckerberg’s words of praise for “doing a really good job in providing connectivity” hardly seems likely to appease their suspicion of the threat Facebook poses to their businesses.

[Image: 1000 Words/Shutterstock.com]

This article by Jeff Barak was originally published in Amdocs Voices. 


    About The Author

    Corporate Editor - Amdocs

    As Amdocs' corporate editor, Jeff manages a team of three editors and is responsible for the content of all Amdocs' external collateral. Jeff is also a frequent blogger on the Amdocs Voices thought leadership blog and other industry publications. In his previous career, Jeff was editor-in-chief of The Jerusalem Post newspaper.

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