Facebook calling: social network phone services coming to a market near you

21 Nov 2012

Should mobile operators be worried that Facebook is about to muscle into the phone business or is it an opportunity to maximise data revenues? The news that Facebook is to operate billing services in France via Bango and Orange, as well as ‘social calling’ phone services via Libon signals a vital new development in the structure of the telecoms industry.

It emerged this week that Facebook has switched on carrier billing mobile payments in France through an alliance with Orange France and social/mobile payments player Bango.

The move means Facebook can accept payments for things such as game credits for HTML5-based content that can be billed directly to a user’s phone bill without the need for credit cards.

Bango has already launched Facebook carrier billing services in 11 markets, including the UK, Germany, the US and France.

The service also works across Wi-Fi on iOS, Android, Windows Phone and Samsung bada smartphones.

Social calling revolution

Facebook and France Telecom are also launching a social calling service that will allow users to call their Facebook friends and groups without needing to know everyone’s phone number.

The new social calling service is powered by IP-calling provider Libon’s Voicefeed technology.

Facebook already provides videoconferencing services to desktop users via an alliance with Skype.

The deal with Libon could muddy the waters with Skype, however, insofar as just like Skype Libon charges for calls to landlines and mobiles.

The implication of the various manoeuvres involving Bango and Libon is that Facebook could become the user’s call mechanism of choice.

In other words, instead of Facebook creating a mobile OS or its own smartphone, the use of Facebook to the mobile phone user goes much deeper than that and is device agnostic.

This represents both a threat and an opportunity to mobile operators. On the one hand there are opportunities to create shared revenue from contract customers who pay for digital goods and content, as well as maximising customers’ use of data when the 4G networks roll out.

On the other hand, it threatens to put the power of voice calls into Facebook’s hands, potentially relegating the mobile operator to the role of ‘dumb pipe’ provider.

For the user to get the best possible value from the deal, outside of buying virtual goods, calls would need to be free ‘on net’ in terms of calling actual friends which makes fixed contracts with operators make sense, while calls to people ‘off net’ or outside of Facebook would revert to the usual billing mechanism.

We live in times of great change and more than ever telecoms operators will need to fight harder than ever to ensure they don’t get relegated to the role of ‘dumb pipe.’

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years