Facebook announcements could hurt operators


Mobile network operators could be the 'digital drug mules of the 21st century' thanks to Facebook announcement tomorrow

Mobile network operators could find themselves the 'digital drug mules of the 21st century' according to Magister Advisors, M&A advisors to the technology industry, commenting on predictions for tomorrow's announcing from Facebook.

The Facebook news is expected to involve a new mobile product or service according to industry pundits.

Looking ahead to tomorrow's Facebook announcement, Victor Basta, managing director of Magister Advisors, said: 'Facebook has been criticised for its failure to exploit the commercial potential of its mobile user base and it's no surprise that most predictions about tomorrow's announcement centre on mobility.'

Magister Advisors points to the main predictions for tomorrow's announcement: a Facebook phone; an app that enables intra-ecosystem calls; or a new range of services that create opportunities to generate revenues from mobile users.

Basta states: 'Mobile networks will carry much of the burden of enabling these services with very little prospect of upside. Telcos are already burdened by the volume of data that travels within the Facebook ecosystem and this will just make matters worse. They are the digital drug mules of the 21st century.'

He noted that Facebook has a growing number of mobile users – more than 600 million according to the latest estimates – and it is under huge pressure to find ways to generate revenues from this enormous nomadic user base. Basta said any mobile service from Facebook will add pressure to the already busy mobile networks.

'What makes it worse for mobile operators, already burdened by huge data traffic, is that they could become tier two utilities; the water companies of the technology industry,' warned Basta. 'Water companies at least have the advantage of being location specific.  Mobile operators don't even have that luxury. They do one thing and one thing only and they are under relentless pressure from global competitors. Capacity and bandwidth issues will increase and it is very difficult to see where the upside will come from.'

Industry figures show that mobile data traffic doubles every year. There are more than six billion mobile subscribers globally and more than one billion data-heavy devices currently in use. Industry forecasts predict that the number of data-heavy devices will rise to 3.8 billion by 2017, said Magister Advisors.


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