Mark Zuckerberg (Facebook Co-founder) – Mobile World Congress (Mar 2015)
Chapters
00:00:02 Uniting the World: Facebook's Internet.org Initiative
Facebook’s Mission: Zuckerberg clarifies that Facebook’s role in Internet connectivity is not through direct infrastructure provision but rather through enabling people to connect and share via their apps. Connectivity has a profound impact, facilitating communication with loved ones, business development, and access to information, health, education, and jobs, leading to economic growth.
Internet.org Progress: Zuckerberg highlights the importance of partnering with operators and shares plans to invite partners to discuss their growth through the Internet.org program. The program offers basic services to non-Internet users, easing them into the digital world and increasing paid and overall subscribers.
Personal Experiences and Insights: Zuckerberg’s travels to various countries revealed inspiring stories of people’s efforts to gain connectivity. In Jakarta, a village formed around a place with connectivity, demonstrating the priority people give to being connected. These real-life encounters reinforced the impact of connectivity in fostering human connections and economic growth.
Strategic Focus: Empowering operators in the industry to accelerate their progress towards their goals is a key focus for Facebook. The program has seen successful launches in six countries, including four in Africa, Colombia, and India.
00:06:40 How Mobile Connectivity Has Changed Global Communities
Government Involvement in Digital Progress: Mark Zuckerberg witnesses the positive impact of government efforts in Jakarta, Indonesia, where cyber-connected villages were established. Government collaborations were crucial, including clearing specific requirements for making this project a reality.
Internet Revolutionizing Education: In a connected village, Zuckerberg observes students using the internet as an educational tool for learning and discovery. Younger generations grow up with the internet and demonstrate a strong grasp of online learning.
Possible Collaboration with Google: Zuckerberg indicates a willingness to collaborate with Google, sharing similar goals in bringing more people online. Previous partnerships, such as the launch of Google Search on Internet.org, represent potential avenues for further collaboration.
Innovation beyond Balloons and Satellites: Zuckerberg highlights that 90% of the world’s population already lives within network range, emphasizing the contributions of the industry. While futuristic ideas like satellites gain attention, the core work is driven by companies like telecommunications operators.
Operators’ Perspective on Messaging Services: Operators view Facebook’s acquisition of WhatsApp as a challenge to their traditional business models. Messaging apps pose a threat to voice and messaging services, which have been the primary sources of revenue for operators.
Regulators’ Role in the Evolving Landscape: Zuckerberg recognizes the regulatory complexities in balancing traditional business models with the need for innovation. He acknowledges the importance of a flexible regulatory framework that allows operators to adapt their business models.
Monetization Trends: Mark Zuckerberg believes people will pay for internet services as they demand them. Phone and SMS were the initial revenue generators, but data and other services are likely to become more significant over time.
Data Usage and Social Media: Facebook is aware that it drives data usage, especially in developing markets where people are first accessing data. Zuckerberg sees social media as a way to accelerate data usage growth, helping operators expand their businesses.
Infrastructure Costs and Sustainability: Zuckerberg acknowledges the significant costs involved in building the necessary infrastructure to connect everyone globally. Facebook aims to be a good partner in supporting the growth of these businesses and ensuring sustainability.
Regulation and Evolution: Zuckerberg emphasizes that he is not a regulator and does not have a specific perspective on the regulatory framework for internet services. He believes the technology, economies, and business climates must evolve as the industry progresses. Zuckerberg trusts that thoughtful individuals are addressing these issues and working towards finding the right solutions. He recognizes the need for evolution in operator business models, especially as the focus shifts to connecting the next half of the world.
00:14:10 Connecting the Final 10%: Internet.org's Strategies for Reaching Rural
*Scaling Internet Access:* Zuckerberg shares plans to reach the final 10% of the world without internet access. Partnerships play a crucial role in expanding connectivity efficiently. Developing new technologies may not hold the immediate solution, as existing operators effectively reach rural areas. Challenges lie in explaining the value of the internet to those without exposure.
*Feedback from Trials:* Trials conducted over the past year have demonstrated the effectiveness of Internet.org initiatives. Positive feedback from partners highlights growth in internet adoption. Collaboration with partners remains essential for continuous improvement.
*Market Variations:* Different market needs demand customized approaches. Developed markets, middle markets like Colombia, and countries like Zambia present varying challenges. Balancing basic free services to attract new users with potential cannibalization risks.
*Cannibalization Concerns:* Partners in countries with higher internet penetration raised concerns about cannibalization of existing paid services. Based on data from rollouts, there is no significant evidence of cannibalization. In many cases, offering free basic services resulted in increased adoption of data, voice, and SMS services, improving partners’ revenues.
*Upside in Established Markets:* Positive results were not limited to markets with low internet penetration. Even in established markets like Colombia, there is significant potential for internet expansion.
00:20:52 Reaching 80% Internet Penetration: Strategies from Telenor
Internet for All: Telenor’s strategy is to provide Internet for All.
Challenges: Only 20-25% of Telenor’s 190 million customers are regular mobile Internet users. The goal is to increase mobile Internet penetration to 80%.
Key Factors: Good quality networks, both physical connectivity and affordability, are essential. Affordable handsets are crucial for mass adoption. The previous decline in feature phone prices below $40 led to a surge in adoption. Attractive services like Facebook play a significant role in increasing internet usage.
Facebook’s Impact: Facebook has over 3.7 billion unique users, despite the 7 billion SIM cards/connections worldwide. Facebook and similar services can contribute to Telenor’s long-term Internet for All goal.
Internet.org partnership: The chapter does not explicitly mention Telenor’s progress in its partnership with Internet.org.
00:22:59 Internet.org Cooperation: Challenges and Rewards in Africa, Latin America, and Asia
Telenor’s Interest in Internet.org: Telenor, an Asian telecom provider, is interested in partnering with Internet.org to expand its customer base and improve connectivity in the long term. The company sees potential benefits in the synergy between its local operations and Facebook’s popular services.
Balancing Financial and Social Impact: Telenor acknowledges the need for a balanced financial formula that ensures both parties’ interests align. The company emphasizes its local presence, employment creation, and tax contributions, while recognizing the importance of finding a sustainable financial model.
Airtel’s Positive Experience with Facebook: Airtel, operating in 17 African countries, initially viewed Facebook with caution. However, their experiences in the last year have been positive, with cooperative efforts leading to encouraging models. Airtel is impressed by Facebook’s increasing human touch and the potential of their partnership.
Tego’s Long-Standing Cooperation with Facebook: Tego, operating in 14 Latin American and African countries, has been working with Facebook since 2013. Tego shares Facebook’s vision of aligning consumer benefits with business success. The company appreciates Facebook’s entrepreneurial approach, which resonates with their own corporate culture.
00:26:37 Internet.org: Business Implications and Opportunities for Telecommunications Providers
Positive Impact on Customer Acquisition and Retention: Christian (SPEAKER_03) views Internet.org as an effective acquisition tool, particularly for the younger population. Internet.org serves as an entry point for individuals with low internet penetration to access and explore the internet for the first time. Once internet access is established, users tend to explore other applications, resulting in increased app usage and potential revenue generation. There has been no observed cannibalization of revenue due to Internet.org.
Encouraging Results in Increasing Data Penetration: In Paraguay, a 30% increase in data penetration was observed after launching Internet.org, with previously inactive data users becoming active subscribers. In Colombia, a 50% increase in new data users was witnessed within three weeks of implementing Internet.org. In Tanzania, a tenfold increase in smartphone sales occurred after the campaign’s launch.
Regulation and the Bigger Impact: Mark (SPEAKER_02) acknowledges the potential business proposition resulting from increased customer usage and the influx of new users. He emphasizes the importance of growth rather than shrinking, as these positive developments indicate long-term ecosystem growth. Regulation, though not widely discussed at the event, plays a significant role in both bottom lines and investment decisions compared to service-based initiatives like Internet.org.
Telenor’s Perspective and Concerns: Telenor, represented by Christian, hopes to achieve greater connectivity figures through its partnership with Internet.org, aligning with their industry goals. As they approach the launch, Telenor’s primary concerns lie in understanding the potential impact on existing products and services, ensuring a smooth integration without adverse effects.
00:33:02 Economic Factors Impacting Mobile Internet Innovation
Cost Structure of Internet Access: The internet model is perceived as free, but the connectivity aspect involves significant costs. These costs include hardware, software, taxes, and spectrum fees. The cost structure is held by operators as part of the go-to-market equation.
Business Proposition for Partnerships: The success of the internet model relies on a longer-term business proposition. Increased traffic, educated customers, and savvy digital citizens create a viable business proposition. Partnerships with internet.org apps provide benefits to both parties.
Data Uptake in Emerging Markets: Data usage increases significantly among users who adopt internet.org apps. In Africa, where data penetration is low, there is a huge appetite for internet access. 30% of users with internet.org apps consume 30% more data than regular users.
Universal Consumer Needs: Consumers across different markets have similar basic needs for connectivity and access to the world. The internet.org app addresses this fundamental need, enabling opportunities and progress. Adaptations to local realities, such as language translations, enhance user engagement and adoption.
Indefinite Availability of Basic Services: The internet.org app is intended to be a basic service app available indefinitely for users. This ensures ongoing access to essential online services and information for users in emerging markets.
00:37:30 OTTs vs. Telcos: Navigating the Revenue Challenge
Zuckerberg’s Vision for WhatsApp: Aiming to create a self-sustaining model for WhatsApp, ensuring its profitability for operators. As more people gain internet access and upgrade to paid data services, the free services will continue to be viable. The continuous increase in revenue and profit will support the longevity of WhatsApp’s free services until everyone in developing countries is connected.
Changing Revenue Models: Messaging was a significant revenue driver in the traditional telecom world. In the data-driven world, messaging business models are evolving due to new perspectives on messaging. Facebook and OTTs approach users differently compared to telecom companies, leading to potential tensions.
Tension between Operators and Facebook: Operators are concerned about the potential loss of revenue streams as messaging shifts from telecom to data. Internet.org initiatives may have contributed to this tension. Operators may hesitate to fully collaborate with Facebook, considering the competitive nature of their relationship.
00:39:50 Addressing Tensions and Balancing Interests in Internet Connectivity Partnerships
Key Considerations for Partnerships:
Striking a balance between providing essential services and avoiding cannibalization of existing revenue streams: Mark Zuckerberg emphasizes the importance of ensuring that Internet.org services complement rather than compete with existing revenue-generating services offered by telecom partners.
Consumer-Centric Approach:
Focusing on basic consumer needs: The panelists agree that prioritizing the needs of consumers and offering essential services is crucial for the success of the partnership.
Understanding Network Constraints:
Limiting bandwidth-intensive services: It is essential to avoid offering services that consume excessive bandwidth, such as video streaming, to ensure the sustainability of the partnership and avoid overburdening network infrastructure.
Constructive Dialogue and Partnership Evolution:
Improved communication and understanding between Facebook and telecom operators: The ongoing dialogue between Facebook and telecom partners has led to more constructive discussions and a better understanding of each other’s concerns.
Addressing Digital Literacy and Connectivity:
Bridging the digital divide: The ultimate goal of the partnership is to extend connectivity and its benefits to the half of the global population that currently lacks access.
Offerings for Cash-Based Societies:
Tailoring services to affordability: Ensuring that services are offered in affordable packages is essential for reaching cash-based communities and enabling them to benefit from connectivity.
00:44:36 Internet.org: Expanding Connectivity and Access Globally
Facebook as an On-ramp to Internet Access: Internet.org provides access to a range of services beyond Facebook, including those offered by competitors. Some critics view Facebook’s role as a primary gateway to the internet as a disadvantage.
Bridging the Connectivity Gap: Panelists emphasize the need to address the remaining challenges in internet access, beyond providing initial connectivity. Access through platforms like Facebook can open up a new world of opportunities for users.
The Network Effect and Affordability: Affordable pricing and relevant services are crucial for encouraging internet adoption. The network effect, which has driven internet growth, can be leveraged to connect the remaining population.
Free Airtime as an Analogy: Operators often offer free airtime when users purchase a SIM card to encourage them to experience and stay with their network. Similarly, providing free access to internet services can help users understand and appreciate their value.
Facebook’s Role in Connecting People: Mark Zuckerberg highlights the importance of staying connected with loved ones, which drives the use of Facebook services. Facebook’s News Feed exposes users to various links and videos, introducing them to new corners of the internet.
Beyond Facebook: The Future of Internet.org: Zuckerberg emphasizes the need to shift the focus of Internet.org towards the companies actively providing connectivity. Operators and infrastructure builders should take center stage in driving internet access globally. Facebook will continue to collaborate with these companies to improve their services and connect more people.
Abstract
Internet Connectivity: A Transformative Force in the Modern World
Leading the Way to a Connected Future: Zuckerberg’s Vision and the Global Impact of Internet Access
In an era where internet connectivity shapes the fate of societies, understanding its implications and the efforts to expand its reach becomes crucial. Mark Zuckerberg, known for spearheading Facebook, has emerged not just as a tech mogul but as a key figure in the global conversation on internet access. This article delves into Zuckerberg’s perspectives, the collaborative efforts with giants like Google, the role of telecom operators, and the challenges and opportunities presented by programs like Internet.org.
Zuckerberg’s commitment extends beyond digital infrastructure; he envisions a world where connectivity is a gateway to opportunity. His travels, like the visit to a ‘cyber village’ in Yogyakarta, Indonesia, illustrate the profound impact of internet access on communities. Here, connectivity transformed a village into a hub of digital activity, underlining the tangible benefits of internet access.
The Internet.org initiative, a focal point of Zuckerberg’s strategy, aims to provide basic services to first-time internet users. It’s more than just a charitable endeavor; it’s an on-ramp to paid subscriptions, fostering a sustainable model for internet access. Zuckerberg’s perspective is clear: the internet is no longer a luxury but a necessity, driving social and economic progress.
Facebook’s Mission and Internet.org Progress: Zuckerberg emphasizes that Facebook’s role in internet connectivity is not through direct infrastructure provision but through enabling connections and sharing via their apps. He sees connectivity as a catalyst for communication, business development, education, and job access, leading to economic growth. Zuckerberg also highlights the significance of partnering with operators for the Internet.org program, which introduces basic services to non-internet users, easing them into the digital world and fostering an increase in paid subscribers.
Personal Experiences and Insights: Zuckerberg’s travels have revealed inspiring stories of connectivity efforts worldwide. In Jakarta, a village evolved around a place with connectivity, showing the value people place on being connected. These encounters reinforce the role of connectivity in fostering human connections and economic growth.
Strategic Focus: Zuckerberg’s strategy focuses on empowering operators to accelerate their progress. The Internet.org program has successfully launched in six countries, including four in Africa, Colombia, and India, showcasing its global impact.
Collaborative Efforts and Operator Perspectives
Navigating the Complex Landscape of Connectivity and Regulation
Zuckerberg’s openness to collaboration is evident in his willingness to work with Google in Zambia, reflecting a broader industry trend. Telecom operators, pivotal in driving internet access, are seen as crucial partners by Facebook and Google. However, challenges such as concerns over messaging apps disrupting traditional business models are present. Zuckerberg acknowledges these fears, advocating for a supportive regulatory environment that facilitates the transition to data-driven services.
Connectivity Drive in Jakarta and Collaboration Prospects: Zuckerberg has observed the positive effects of government initiatives in Jakarta, where cyber-connected villages were established. These efforts highlight the importance of government collaborations in realizing such projects.
Internet Revolutionizing Education: In these connected villages, Zuckerberg notes how the internet is used as an educational tool, with younger generations showing proficiency in online learning.
Possible Collaboration with Google: Zuckerberg expresses a readiness to collaborate with Google, given their shared goals in increasing internet access. Past partnerships, like integrating Google Search with Internet.org, hint at future collaborations.
Innovation beyond Balloons and Satellites: While acknowledging the intrigue of futuristic technologies, Zuckerberg points out that most of the world’s population is already within network range, underscoring the importance of the industry’s ongoing efforts.
Operators’ Perspective on Messaging Services and Regulation’s Role: Operators view the rise of messaging apps as a challenge to their traditional revenue streams. Zuckerberg acknowledges the need for a regulatory framework that allows operators to evolve their business models in this changing landscape.
The Monetization and Regulatory Puzzle
Zuckerberg’s Balanced Approach to Growth and Regulation
Zuckerberg sees monetization as a natural outcome of providing valued services. He views Facebook as a catalyst in developing markets, driving data usage and assisting operators in their growth. However, he avoids getting entangled in regulatory debates, focusing instead on Facebook’s role as a responsible industry partner.
Internet Monetization and Regulatory Evolution: Zuckerberg believes that as internet services become increasingly demanded, they will naturally become paid services. He acknowledges that while phone and SMS were initial revenue sources, data and other services are gaining importance. Zuckerberg emphasizes his non-regulatory role, trusting that experts will address these issues thoughtfully.
Data Usage and Social Media: Facebook recognizes its role in driving data usage, particularly in developing markets. Zuckerberg sees social media as a key factor in accelerating data usage growth, benefiting operators.
Infrastructure Costs and Sustainability: Acknowledging the costs involved in building global connectivity infrastructure, Zuckerberg commits to supporting the growth and sustainability of these businesses.
The Voice of Operators: Telenor, Airtel, and Millicom
A Win-Win Collaboration for Internet Expansion
Operators like Telenor, Airtel, and Millicom view their partnership with Facebook as mutually beneficial. They focus on leveraging local resources and infrastructure to expand connectivity, aiming for a financial balance that benefits all. Their experiences underline the positive impact of Internet.org, from increasing data penetration to boosting smartphone sales.
Telecom Providers’ Perspectives and Balancing Financial and Social Impact: Operators like Telenor see potential in partnering with Internet.org to expand connectivity and their customer base. Telenor acknowledges the importance of finding a sustainable financial model that balances social and financial impacts.
Airtel’s and Tego’s Experiences with Facebook: Airtel’s cooperation with Facebook has been positive, leading to encouraging business models. Tego, operating in various countries, aligns with Facebook’s vision of mutual consumer and business benefits, appreciating Facebook’s entrepreneurial spirit.
The Broader Picture: Connectivity as a Catalyst for Change
A Sustainable Model for Internet Access
The journey towards global connectivity is filled with challenges and opportunities. Zuckerberg’s vision of a sustainable model where users transition from free to paid services is key. Balancing the interests of operators and OTT providers is crucial in this landscape.
Internet.org’s Business Impact and Data Penetration: Internet.org has shown positive effects on customer acquisition and retention for telecom operators. Increased internet adoption leads to more users exploring various online services, benefiting revenue generation. Data penetration has significantly increased in markets like Paraguay, Colombia, and Tanzania, post-launch of the program.
Regulation and Telenor’s Perspective: Regulation is pivotal in shaping business propositions and investment decisions in internet services. Telenor aims to enhance connectivity through its partnership with Internet.org, ensuring a smooth integration with existing services.
Internet.org: An On-Ramp and a Challenge
The Dual Role of Facebook in Expanding Internet Access
Internet.org exemplifies the transformative power of connectivity. Facebook, often the first internet contact for new users, serves as a gateway, yet its dominance raises questions about limiting exposure to a broader range of services. Overcoming challenges like lack of awareness and affordability is key.
Insights into the Internet.org Model and WhatsApp’s Revenue Model: The cost structure of internet access involves significant expenses, but the business model relies on increased traffic and educated digital citizens. Zuckerberg aims to create a self-sustaining model for WhatsApp, ensuring its profitability for operators. The shift from traditional telecom to data services has led to tensions between operators and Facebook.
In conclusion, Zuckerberg’s vision and the collaborative efforts in the telecom industry
mark a transformative era in global connectivity. The journey is complex but promises a future where internet access empowers and connects, transforming lives and communities.
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