Zuckerberg focuses on connecting the next 3 billion

Zuckerberg focuses on connecting the next 3 billion

Zuckerberg focuses on connecting the next 3 billion

Every now and then an event occurs that grips a nation. Something that will make the nation stop and take note. Streets are quiet, cars are parked, as people bunch around TVs to watch the action unfold.

In England, that can mean a Royal Wedding or the national football team has reached the quarter finals of the Euros or the World Cup: For the likes of Brazil, Italy, Germany for example, it could be that their national team has reached the finals.

For the Mobile World, that event was the keynote speech (or the cliched "fireside chat" as it transpired) of Facebook head honcho Mark Zuckerberg. Queuing to get into the auditorium started hours before the 6pm session started. The doors to the auditorium were closed 30 minutes before when it was standing room only. This then, was the Mobile World Congress 2014's Cup Final.

When Zuckerberg took to the stage, for a minute or two, the floor resembled that of a rock concert with hundreds of device screens thrust upwards as people got a photo of the 29-year-old, t-shirt wearing, multi-billionaire. When the hullabaloo died down, it was down to business.

Facebook 2

Not surprisingly, the acquisition of WhatsApp was first on the agenda.

"We see WhatsApp on a path to connecting 1 billion people and we want to help them realise that dream of connecting a lot more people," Zuckerberg explained to the throbbing auditorium.

"In terms of a fit for Facebook, we talked about what it would be like to connect everyone in the world [with WhatsApp]. So when we were aligned on the vision of connecting everyone in the world, we could work on making it such a great fit. And in doing so, building a more profitable model [for WhatsApp]."

He says WhatsApp will be left alone to "operate completely autonomously" with the availability of the Facebook tools as and when required. "The vision is to keep the service exactly the same." Unlike Facebook, WhatsApp has built an infrastructure to deliver content efficiently. "Not only do they not use the content, they don't even store it," he revealed.

Based on WhatsApps' potential, Zuckerberg believes he has underpaid for the company. "By itself it is worth more than $19 billion," he said. "I could be wrong. It could be the one service that gets to 1 billion and then doesn't make any money."

But as he highlighted, the likes of Line and Kakao are already monetising at around $2-3 per person, and he is confident that Facebook can help WhatsApp achieve similar levels. "By being part of Facebook, they can focus on reaching 1 billion, rather than focusing on connecting 2-3 billion more people."

Connecting the next 2-3 billion people is the ambition of Internet.org, the partnership between Facebook, Samsung, Ericsson, MediaTek, Nokia, Opera and Qualcomm to deliver affordable internet access to everybody.

"Most people cannot access the internet," Zuckerberg states. About one-third of the world’s population are connected, yet almost 80% of the world's population live where there is 2G or 3G coverage delivering internet access.

“When you have access to the internet, you can access basic financial services, you can get credit to get a home, access health services and medical advice, and access basic education materials. If you increase the number of people in emerging markets with access to the internet, you can decrease the child mortality rate by 7%.”

He says people can discover things on Facebook – which is one of the main reasons why people consume more data. But of course, if people do not understand the benefit of accessing the internet and the basic services it can provide, they do not understand why they should spend a couple of dollars a month on a dataplan to do so.

“Why are the next 2-3 billion people to go on the internet, not on the internet today? A lot of the people have the money and can afford it, but they don't know why they should spend their money on dataplans... They know of Facebook and WhatsApp. And once they can access these for cheap or free, they then come over other services. The important thing is that it shows people why it’s rational and good for them to spend their limited money on the internet. All the data and research shows that in doing so, it makes the economy better.”

From the consumer perspective, Zuckerberg says that the most expensive part of accessing the internet is the dataplan. He says that to own an iPhone for 2 years costs about $2,000, though he is quoting one of the industry's top-end devices. Given MWC this year saw the birth of the $25 smartphone, device affordability is being addressed leaving the cost of the dataplan next up for scrutiny. Otherwise, "we're really not on a path to connect everyone unless something dramatic changes," he added.  

"Our vision isn't to connect one-seventh of the world,” Zuckerberg said referring to Facebook’s global reach, “but we cannot do it alone, so we need to build these partnerships."

In the Philippines, Internet.org has worked with Globe Telecom to deliver free basic services with upsells. Within a few months the number of people accessing the internet has doubled.

Zuckerberg says that Internet.org does not have the capacity to work with a lot of partners, but would consider working with a further 3-5 mobile operators over a 12-month period to see how the model works, followed by a period of expansive carrier partnerships in the subsequent years.

He expects to lose money in the short term, partly because there is no clear plan other than “this will be good for Facebook, but it will be good for Internet.org” too.

“The internet is not something that any one company or organisation works on. We think the model we're building is pretty universal. We've tried to optimise so far is partners that believe in this. It is an investment and will take a while. But it will take some investment. So we have focused on people that believe what we're trying t do.”

So what do the mobile operators think? See related article by clicking here

nick@mobilesquared.co.uk

 

 

 




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