Facebook CEO Mark Zuckerberg addressed the role of his company in increasing access to the internet, in a panel discussion at Mobile World Congress in Barcelona. The launch of the Internet.org app, which is backed by Facebook, in emerging and developing markets has resulted in nearly 7 million people using mobile data for the first time, he said. Zuckerberg was joined on stage by representatives of some of the operators that have launched the app, which provides free data for connecting to popular internet sites. These included Telenor CEO Jon Fredrik Baksaas, Airtel Africa CEO Christian De Faria and Mario Zanotti, SVP of Operations at Tigo parent company Millicom.
According to the Facebook CEO, operators’ rate of acquisition of new data customers increased by at least 40 percent in those countries where the Internet.org app has launched. In Colombia, the number of people using data on Tigo’s network increased by 50 percent, and Tigo’s monthly smartphone sales grew tenfold in Tanzania since the launch of Internet.org. In Zambia, Kenya and Ghana, Airtel saw increases in the number of people using data and data usage itself, and both voice and SMS activity grew across Africa. As Facebook is one of the most popular online services, the company can play a key role in helping mobile operators grow their data businesses, Zuckerberg said. “The overwhelming feedback we’re hearing from our partners is that it works. It grows the internet and grows their business,” he said.
With its Internet.org initiative, deep-pocketed Facebook has purchased and bundled access to low-bandwidth sites such as Wikipedia, health-related services, and Facebook itself and provided it free of charge to users in developing countries. The purpose is partly philanthropic, but also promotional. As Zuckerberg observed at MWC, Internet.org has resulted in large upticks in the number of people using data in developing markets, as well as in the actual amounts of data consumed. The idea is that when those first-time data users begin to want internet-based services that are not covered by Internet.org, they will pay for more data, as well as for higher-end devices. The extent to which that will happen depends on how much disposable income those users have, so the long-term influence of Internet.org on operators’ revenues, beyond the subsidies Facebook pays them, remains to be seen.
Other Notable Developments
Philippines operator PLDT and its mobile subsidiary Smart Communications have expanded their offering of Disney content to their combined 75 million mobile and broadband subscribers nationwide. This is part of the expanded multi-year, multi-platform partnership of PLDT with The Walt Disney Company Southeast Asia, through its digital entertainment arm Disney Interactive. After initially providing access to Disney’s online games and e-books to Smart, the Disney Interactive portfolio will now be offered at home through PLDT’s home digital services unit PLDT Home. Smart will also launch Disney-branded content packages for prepaid, postpaid and broadband plans.
We have noted frequently that offering special access to premium entertainment content is an excellent way for telecom operators to acquire and retain business. PLDT has decided to expand its Disney offering from mobile to include home access via broadband, presumably because the initial offering, which took place at the end of January, met with a favorable response from the public in the Philippines. We expect that the multiyear partnership between PLDT and Disney will be a win-win.