Facebook leading the way in Mobile disruption

 

After digesting some of the insights from Barcelona during Mobile World Congress, it's becoming more and more apparent that Facebook, not Apple or Google, nor Ericsson or Cisco, and especially not Vodafone or China Mobile, is leading change in mobile.

By Q4 2017 Facebook will probably have it's own global mobile network competing with operators Offering Free Communications (that's how they will acquire customers) leveraging:-

- Facebook "connect" for activation

- their own app store for developers to commercialize their apps

- a mobile phone with better connections to their "TIP"** basestations

- and advertising to commercialize the service

While Apple is working on getting the eSim into their mobile phone with the hopes of targeting their 1B active i-phone users to upgrade their phone, it's just a matter of time until they launch their own global mobile network as well. Obviously they will continue to remain relevant as an entertainment company, appealing to the affluent mobile customers willing to pay for services designed to retain their privacy.

Google with Android, Youtube, Doubleclick, Project FiJibe is also working to accelerate innovation in mobile. They are monetizing mobile with their advertising platforms and deeplink search capabilities benefiting from any increase in time spent on mobile devices.  

But it's really FB that is driving the pace of change with:-

 - Telecom Infra Project is open sourcing the base station antenna technology HW architecture, software OS and tools. This will do to the telecom infrastructure business what android did to the mobile handset industry.

- The industry commitment to Virtual reality (VR) is largely thanks to the $2B acquisition of Oculus Rift by FB who in turn Open Sourced the tools for developers to build apps for Oculus Rift. http://open-gear.com/ is becoming the new standard SDK for the mobile with Samsung being one of the strongest supporters.  

- Watch out for announcements with tools and a developer portal with API's for developers to build apps on top of the Facebook Messenger platform during F8 in 2 weeks. They will be opening their messaging platform even further to developers. 

- Facebook, with their customer base; their developer community; and an eSIM will create a huge global mobile operator and likely Apples biggest competitor. At the same time, will the messenger be the new OS for the mobile device too?

- Add to the above the presence and impact their apps have on mobile, and FB clearly has a 3.2B strong footprint in mobile already, in key categories like messenger, social, video and images - taking up close to 45% the 3 hours consumers spend on the mobile a day.

 

The operators are looking to counter the above by lobbying against Facebook, as just happened in India, but this is only a matter of time until this crumbles under the consumer pressure looking for free communication services on their mobile.

The  eSIM will break the first barrier, and it might just be Apple that will pave the way, but it'll be Facebook that offers their mobile service for free in return for the consumer sharing their data that will open the floodgates. Apple will continue to charge a premium, but will protect your data.

In an attempt to find a commercial angle, telecom operators have pulled together and combined some 2Bn customers and have agreed to lauch "mobile connect".

They will need to roll this out rapidly at local level "developer engagement" activities to ensure local enterprise and developers use mobile connect to identify and authenticate users within their apps.

For existing operators to remain relevant, they will need to invest in business model innovation, leveraging their network and spectrum as assets. This is still a hugely valuable asset with a number of innovative commercial ways to increase utilization and convert arbitrage into higher margins and revenue. 

 

To get a feel of what content and services are beginning to look like:-

Quartz news app to see news in your messenger. 

3 self care app

Telenor prepaid top up

 

Just when you think that Facebook must be topping out they add something else impressive to drive aggressive growth.

 

**"The Telecom Infra Project(TIP) is an engineering-focused initiative driven by operators, infrastructure providers, system integrators, and other technology companies that aim to reimagine the traditional approach to building and deploying telecom network infrastructure." 

TIP "Members include Facebook, Intel, Deutsche Telekom, EE, Globe, SK Telecom and other operators, equipment providers, systems integrators and technology companies from around the world"

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