By Pamela Clark-Dickson February 25, 2014
Facebook CEO Mark Zuckerberg used his MWC 2014 fireside chat with author David Kirkpatrick on Monday evening to provide an update on the progress of the Internet.org initiative and to promote the opportunities it offers to mobile operators. He also outlined how the company’s US$19 billion acquisition of WhatsApp last week aligns with Internet.org’s ambitious goal of enabling Internet access to all mobile users.
The Internet.org project involves Facebook and six handset vendors – Samsung, Ericsson, MediaTek, Nokia, Opera and Qualcomm – and has the objective of enabling Internet access for, and promoting Internet access to, all mobile phone subscribers, not just those with feature phones and smartphones. By so doing, Zuckerberg argues that, not only could mobile Internet access help improve the lives of people in emerging markets, but that it could also ultimately prove profitable for mobile operators.
“Connectivity in itself is not an end, it is the things that connectivity brings,” Zuckerberg told delegates. These things include access to financial and payments services, healthcare information and services and basic education, with Zuckerberg citing a Deloitte study which found that increasing mobile Internet adoption among subscribers in emerging markets had extremely beneficial outcomes, for example, in reducing child mortality and improving economic wellbeing.
He added that, even though 80% of the world now has Internet-capable network coverage, there is no corresponding penetration rate for Internet access, for two main reasons: affordability of the service, and also the fact that many people in emerging markets do not know why they might actually want to access the Internet. “If you ask someone if they want a data plan, they say no; if you ask them if they want Facebook, then they say yes,” said Zuckerberg. Once mobile subscribers start consuming Internet-based content and services, they may then start becoming interested in accessing other Internet-based content and services, which in turn would generate more data traffic and revenues, and ultimately, profit, for the mobile operators.
At the moment, however, Zuckerberg says Facebook is very much at the stage of “sharing the vision”. He gave an overview of two Internet.org partnerships which are already delivering results. In the Philippines, Internet.org has been working with mobile operator Globe on an infrastructure project which has already seen the penetration of mobile Internet double among the Globe subscriber base, with overall subscriber numbers increasing 20%. In Paraguay, Internet.org is working with Tigo on a similar project, which has seen the penetration of mobile Internet increase by 50%, with daily Internet use growing by 70%. “We are at the point where we have proved to ourselves that the model can work,” Zuckerberg said.
The next step is to involve more partners, which is partly the reason for Zuckerberg’s attendance at MWC 2014: “We don’t have the capacity to work with a lot of companies yet, but we want to find three to five companies that we can work with over the next year, and if we can do that successfully then we’ll be back [at MWC] next year or the year after that in a position to be able to offer [the Internet.org capability] to everybody.”
Over the next year, Facebook plans to trial the complete vision of Internet.org, including a range of services and upsells, based on the knowledge that it has about its customers, its own services and the carriers. “What we envision for carriers is a model that can help them get more subscribers and connect more people,” Zuckerberg said. “It is up to them to choose which services they want to give people for free. Our model and what we are trying to build is proof that building an on-ramp is better for the Internet and better for our customers.”
The project will involve three main pillars: reducing the cost of Internet infrastructure; optimizing data use on the network; and increasing the amount of upsells to subscription to basic services. Zuckerberg told delegates that a year ago the average Facebook user used 14MB of data per day; that has now decreased to 2MB per user per day. Additional data efficiencies are likely to be achieved via Facebook’s acquisition of Onavo, a provider of client-side compression technology. Zuckerberg also spoke about how, in addition to developing applications, he wants developers to develop empathy for the users of those applications; he cited a graduate program in which Facebook sent graduates to emerging markets to research how well Facebook performed on mobile devices, and said the resulting intelligence has been used to make improvements to the service.
With regards to upsells, Facebook has already found a 10x improvement in upsells with its existing carrier partners. “The more friction we can take out of that purchasing process, then the easier we can make it for people to purchase content.”
When questioned as to whether the Facebook board is supportive of a project which will not deliver profits in the short term, Zuckerberg said if Internet.org can deliver benefits in terms of improvement in areas such as global health initiatives and economic development, then the board are not likely to raise objections. “[The directors] are on our board because they agree with our mission,” Zuckerberg says.
And it’s a mission which also resonates with WhatsApp, according to Zuckerberg. While acquiring WhatsApp made sense to Facebook due to the value inherent in the company itself, with its 465 million monthly active users and the potential to deliver significant revenues from that user base, WhatsApp CEO Jan Koum shares Zuckerberg’s enthusiasm for Internet.org and for connecting more mobile users to the Internet. “When Jan and I first met we started talking about this, about what it would be like to connect everybody in the world,” Zuckerberg said. “It wasn’t until we got aligned on that vision between Facebook and WhatsApp that we started talking about numbers. That vision is what I think makes the companies a great fit.”
And, finally, would Facebook make another bid for picture messaging application Snapchat? “After buying a company for US$16 billion, we are probably done for a while,” Zuckerberg said.
Source:
Informa Blog
