Though Facebook isn’t making as much money via its mobile services as much from its PC services, it surely has had a profound impact on the business of mobile carrier companies. Having recently informed stakeholders that the mobile version is an aspect of top priority this year, Facebook’s entry can be both a plus and a minus for wireless carriers.
This month saw Facebook introduce ‘App Center’, an app store similar to that of Apple and Google. Facebook’s App Center enables users to buy smartphone apps. 70% of the revenue goes to the developer and Facebook gets 30% of it. However, the plus point here for mobile carriers is the web-based payment mode. Via this mode, which isn’t present in Google or Apple’s app stores, the purchase cost appears on the user’s phone bill rather that the user having to key in his/her credit card number. Through this payment mode, the mobile carrier also gets a cut upon the sale of an app.
Another benefit for carriers is that Facebook’s unparalleled popularity has boosted not only the sale of smartphones, but has also increased purchase of data plans for mobile internet. Carriers are gaining a lot from this with AT&T and Verizon reporting, in the last quarter, revenues of $6 billion from mobile data plans alone!
However, not all is rosy for the telecom companies. Mobile carriers, not surprisingly, have seen a decline in the usage of their text message facility. The Facebook app allows users to put up status updates, upload photos and send messages, literally eliminating the need for sending an SMS. A telecommunications consulting firm, Strand Consult, observed that smartphones users spend a lot of time browsing Facebook and hence lesser amount of time using the carrier’s service.
Further, there are some apps in the Facebook App Center that are made exclusively for iPhones or Android phones. Upon sale of such apps, Facebook doesn’t gain anything monetarily. However, apps which use your Facebook account to log in bypass the need to have anything other than a data plan. The loss for mobile carriers is in that the sale of these apps promotes the services of the app maker (Facebook, Google and Apple in this case) and there is nothing in it for the carrier.
Lastly, as pointed out by Mr. Jan Dawson, a telecom analyst at Ovum, if Facebook introduces a voice chat facility, users may start using Facebook to talk to friends rather than use the carrier’s service to make a call. Hence, carrier’s are still not entirely on board with Facebook at the moment, since it mostly reduces the need for their own services by allowing easy and cheap access to services carriers traditionally charge an arm and a foot for.
