Zuckerberg says forget drones and balloons, for internet to flourish mobile operators are crucial

3 Mar 2015

While Google and Facebook have been experimenting with novel ways of delivering mobility to deprived areas, Facebook CEO Mark Zuckerberg says the real work will be done by mobile operators.

“90pc of people live within the range of a network, but the real work happens here by companies,” Zuckerberg told the Mobile World Congress last night. “We are not really the ones leading this. Facebook is one of the primary apps that people want to use and it is important not to lose sight of the fact that the real companies driving this are the operators.”

Yesterday Google’s chief of products Sundar Pichai told Mobile World Congress that its Project Loon and Project Titan will launch constellations of broadband-transmitting balloons and airplanes this year to provide broadband to disaster struck or connectivity deprived areas.

Facebook is also understood to be planning to launch a fleet of solar-powered drones that will connect billions of people on earth with the internet. The social network is looking at sending up solar-powered flying drones that will cruise at between 60,000 to 90,000 to avoid airspace.

Stay grounded in a blue sky world

But last night Zuckerberg said that these “blue sky” projects were only on the fringe of what really needs to happen if connectivity is to lift all people up economically in the coming decade.

Internet.org, Zuckerberg’s project to connect the 4bn people who still lack first world connectivity, has proven to be one of the first companies to actually launch a test bed for closing the gap, with the first trial service having begun in the African state of Zambia last July, followed by Tanzania and Kenya. It is now looking at India which has a population of more than 1bn people.

Zuckerberg said he has spent the last year travelling the world to connect with various projects happening in India, Indonesia and Africa. “I visited programmes that gave people basic services that even if they had never used the internet in their lives have found that the internet serves as an on-ramp for jobs and education.”

He said he visited cyber villages in Indonesia that became focal points for the community because they had broadband.

“It is really inspiring to see and going to talk to people who have fought so hard to get connectivity enabled in their home and to get the benefit of it.”

Zuckerberg said that Facebook is working with Google around the world and sees the search giant as a partner in its efforts. “When we launched Internet.org with the operator partner there one of the first apps we launched was with Google Search, we would love to do more with them.”

He said that balloons and drones were experiments and not the real solution for bringing broadband to deprived areas of the world: the real solution is working with operators.

“There’s a lot of press who want to write about experiments with different ways of connecting – balloons, planes and satellite – but that’s actually at the fringe of what’s going on.”

He said that ways need to be found to reduce the infrastructure costs of deploying mobile but also the commercial models. “It’s about money if we want to grow the industry faster and make progress even faster.”

The key to Internet.org, he said, is partnerships with mobile operators like Airtel Africa, Telenor and Millicom.

But Whatsapp with the free stuff Mark?

But did Zuckerberg not see a contradiction in terms of its US$22bn acquisition of Whatsapp, an app that provides voice and text for free and how this might make the economic models for operators harder to deliver.

“The perspective I hear is that it is nuanced,” Zuckerberg said. “The business for operators used to be voice and messaging, but they are increasingly shifting towards data and other things. It’s not Whatsapp is bad for you, the real challenge is evolving their businesses at the right speeds. Operators have the flexibility they need to evolve their business models for the future.

“I’m not a regulator, but that’s the high level of concern. These apps drive business and everybody is actually excited about that.

“People want to use these different services, people are going to pay. Before it was phone and SMS but over time it was data and other services. I’m not an operator or a regulator but at Facebook we know we drive data usage, especially in developed markets. After that it is about being able to communicate and stay in touch with networks at the same time.

“We realise that this needs to be sustainable – building infrastructure is going to be expensive and costs tens of billions a year. We want to be helpful.”

Zuckerberg said that connecting the next half of the world’s population will be different from the current. “It has to be an evolution but I am confident that over time it will happen.

“The technology we have today is not efficient enough to cost effectively serve everyone especially in rural areas. Just because we are working with planes and satellites doesn’t mean we will solve it. We need the operators and Ericsson, for example, is a part of Internet.org.

“People talk about that stuff [planes, drones and balloons] because it is sexy, but the bigger deal is there is a lot of folks who haven’t grown up with the internet. We are working with operators to craft specific programmes that help people get the tools they need to get online.

“We have to customise it in a way that is specific to countries and their need, in Africa it is health.”

Cracking the economic model to connect the other half of the world’s population

He said that he is working with mobile operators in developing countries to crack the economic model.

“There are developed markets where everybody is on the internet. And when people use more voice and more data ARPU (average revenue per user goes up).

The CEO of Milliband Mario Zanotti said that data explodes in countries where it is deployed. “We have worked with Facebook and we have had to fine-tune our business model – its mixing art with science – but across the board we are seeing a 30pc increase in data usage. In Columbia there has been a 50pc increase in people using data. In Tanzania we have seen a 10-fold increase in smartphone sales since we launched Internet.org.”

Zuckerberg said he is taking a long term view. “We need to create a model that is credible for operators to have on perpetually. As more people connect to the internet and continue to use the free services and as long as revenue and profits ramp, it makes sense to keep the experience on long term.”

But he said it’s a balancing act and that it is also about being conscious of operators’ constraints. “We go out of our way to make it so the services like Facebook Messenger and Whatsapp work. But they have VOIP and it would be too cannibalistic to introduce them in some markets.

“But we have services that people love and that are drivers of data and we try to make this work in such a way so that it is a profitable model for partners.”

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