Partner to make the cost of ownership for mobile cheaper in developing markets
The GSMA and Facebook, through its Internet.org partnership, today announced a joint initiative designed to connect the billions of people globally that currently have no access to internet-based communications services.
The joint initiative will focus on reducing the total cost of ownership (TCO) of mobile, given that mobile will be the enabling technology for the vast majority of people in developing markets. The activities undertaken by the GSMA and Facebook will entail working with governments in developing markets to address key factors that have an impact on affordability and availability. The partnership will focus on creating a sustainable environment to incentivise mobile infrastructure investment and usage, as well as eliminating or reducing existing mobile-specific taxation or refraining from imposing new such tax regimes.
'While there are nearly seven billion mobile connections worldwide, there are only 3.4 billion people that currently have mobile phones,' said Tom Phillips, chief regulatory officer, GSMA. 'Mobile will offer many around the world, particularly in emerging markets, their only access to the internet and the information and communications services it enables. Connecting the next billion is a major goal of the GSMA and we are pleased to be working with Facebook and Internet.org to make this a reality.' However, Mark Zuckerberg said yesterday in his keynote speech at Mobile World Congress in Barcelona that the problem with connecting people to the internet was in mobile data plans, not in access to devices.
Eden Zoller, principal analyst at research firm, Ovum, commented on Zuckerberg's statement: 'Zuckerberg argues that the outstanding barrier in connecting people to the internet in emerging markets is no longer the cost of phones, but expensive data plans. The only way this will change is if more operators introduce unlimited bundles with free access to basic internet services like Facebook Messenger and WhatsApp, along the lines of the bundle Globe Telecom offers in the Philippines.
'Zuckerberg says Facebook wants to enable direct access to basic internet services the way that 911 does for emergency services. Facebook wants other operators to adopt a model like Globe Telecom's, which offers all the major global OTT messaging services for free as part of its core call and text bundle, and is looking to work with three to five operator partners over the next year. But whether operators will buy into Facebook's vision remains to be seen,' noted Zoller.
She commented that Zuckerberg's proposal is Facebook-centric, with the social network and OTT players reaping the immediate benefits. Continuing, Zoller stated: 'The direct monetisation prospects for telcos are thin, a point Zuckerberg admitted by conceding the model needs fine tuning to strengthen the business case for operators. There are of course indirect benefits to carriers, such as the increased mobile internet usage and subscriber gains experienced by Globe Telecom, but the question remains as to whether this will be enough to counter the negative impact OTT services are having on operators.'
Recent GSMA study 'Mobile Taxes and Fees: A Toolkit of Principles and Evidence' examined the current taxation burden on mobile in 19 countries in developing markets. The research findings show that taxes on mobile restrict the growth of the sector, as well as consumer uptake of mobile services.