Spotify is understood to be planning a free ad-supported version of its streaming-music service for mobile devices.
Dublin: 07.12.2013 05.49AM
Mark Zuckerberg, CEO of Facebook
Despite having ramped up more than 1.15bn users on his social network Facebook, Mark Zuckerberg said the world’s mission should be about connecting the next 5bn people to the internet for social and economic reasons. He said internet connectivity should be a human right and urged telcos to develop a model where basic internet services like weather, messaging and information should be free to access.
Zuckerberg pointed out that there are currently 2.7bn people on Earth online, one-third of the world’s population, and that this is growing by 9pc each year.
“But that’s slow considering how early we are in the internet’s development. Even though projections show most people will get smartphones in the next decade, most people still won’t have data access because the cost of data remains much more expensive than the price of a smartphone,” he said.
In what he described as his “rough plan”, Zuckerberg said the key is to make internet access more affordable by making it more efficient to deliver data, improving the efficiency of apps we build and helping businesses drive internet access by developing a new model to get people online.
“I call this a ‘rough plan’ because, like many long-term technology projects, we expect the details to evolve. It may be possible to achieve more than we lay out here, but it may also be more challenging than we predict. The specific technical work will evolve as people contribute better ideas, and we welcome all feedback on how to improve this.
“Connecting the world is one of the greatest challenges of our generation. This is just one small step toward achieving that goal. I’m excited to work together to make this a reality.”
One of the key hurdles Zuckerberg said needs to be overcome is the cost of data and mobility.
He said there are more than 5bn mobile phones in the world, 4bn of which are feature phones with the remainder being smartphones.
“As smartphone prices come down, many people who currently have feature phones will be able to afford smartphones over the next five years. It’s easy to assume that when people get smartphones they’ll also have data access. It’s hard to even think of what it means to have a smartphone without data. But it’s not a given. Even though projections show most people may soon have smartphones, the majority of them still won’t have data access.
“This is because, in many countries, the cost of a data plan is vastly more expensive than the price of a smartphone. In the US, for example, an iPhone with a typical two-year data plan costs about US$2,000, where about US$500 to US$600 of that is the phone and US$1,500 is the data.
“In turn, the vast majority of the prices people pay for data plans go directly towards covering the tens of billions of dollars spent each year building the global infrastructure to deliver the internet. Unless this becomes more efficient, the industry cannot sustainably serve everyone.”
Zuckerberg said there is an intrinsic link between internet access and the economic health of a nation in the 21st century
“Before the internet and the knowledge economy, our economy was primarily industrial and resource-based. Many dynamics of resource-based economies are zero sum. For example, if you own an oil field, then I can’t also own that same oil field. This incentivises those with resources to hoard rather than share them. But a knowledge economy is different and encourages worldwide prosperity. It’s not zero sum. If you know something, that doesn’t stop me from knowing it, too. In fact, the more things we all know, the better ideas, products and services we can all offer and the better all of our lives will be.”
He pointed to an analysis by McKinsey that shows the internet now accounts for a larger percent of GDP in many developed countries than agriculture and energy.
It has accounted for 21pc of GDP growth in developed countries for the last five years, increasing from just 10pc over the past 15 years.
“About 75pc of the gains are experienced by companies outside of the technology industry. And the internet creates jobs, with 2.6 new jobs being created for every job lost to gained efficiencies,” Zuckerberg said.
Zuckerberg pointed out that most people who have yet to experience the internet don’t understand data plans but they’ve heard about services like Facebook and messaging.
He called for the provision of free access to basic internet services in a way that enables everyone with a phone to get on the internet and join the knowledge economy – while at the same time enabling the telecoms industry to continue to grow profits and build out infrastructure.
“Today, the global cost of delivering data is on the order of 100 times too expensive for this to be economically feasible, yet the cost of subsidising even basic services for free would exceed many people’s monthly income and it would be extremely difficult for the industry to build a profitable model.
“However, with an organised effort, we think it is reasonable to expect the overall efficiency of delivering data to increase by 100 times in the next five to 10 years. This will come from two types of innovation: bringing down the underlying costs of delivering data, and using less data by building more efficient apps. If the industry can achieve a 10 times improvement in each of these areas, which we believe is possible, then it becomes economically reasonable to offer free basic services to those who cannot afford them.”
He said the key is to define what “basic” internet services actually means and he offered simple apps like weather and text-based services as a starting point, while by comparison data-intensive experiences like streaming music, high-resolution photos and videos consume the majority of all data.
Zuckerberg said basic services can also be defined as tools that allow people to discover other useful content.
“Services like messaging, social networks, search engines and Wikipedia fit this definition well, but we’re not prescribing any specific set of basic internet services. Instead, we believe that the more efficient we can make this model, the more access the industry can collectively provide to basic services.
“And even beyond basic services, all of the technology improvements and efficiencies will make it easier for everyone to access all internet services,” Zuckerberg said.