Should Facebook Become a Mobile Service Provider?

By Gary Kim October 16, 2012

You’ve heard complaints for years from telecom executives that third-party app providers build businesses on the back of telco-provided access services, but that the access providers do not share in the revenue created.

Now you have the reverse being argued, that application providers such as Facebook create huge value for telos, but do not participate in the access revenue stream.

In other words, nobody is ever completely happy with their share of ecosystem revenue. Strand Consult speculates on whether Facebook is willing to look beyond advertising as a source of revenue, and whether Facebook would become a mobile virtual network operator – as a way to create a new revenue stream, as well as to recapture some of the value it believes it is creating in the ecosystem.

As some have speculated about the value of Facebook creating its own branded smartphone, Strand Consult now speculates about the value of Facebook becoming a service provider.

Becoming an “MVNO is a logical step for Facebook the world’s largest communication platform,” Strand Consult analysts argue.

One billion users already consider Facebook as their de facto telephone book for friends and family and use the platform for communicating by SMS, text, image and video, according to the firm.

So adding mobile voice and data wouldn’t be completely odd.

Aside from its huge user base, Facebook has credit card credentials on file already for millions of its users, many of whom purchase premium games, driving one-sixth of Facebook’s revenue.  

Facebook could offer mobile SIM cards online, and there are a number of companies than can provide the billing and fulfillment.

If the mission of the company is to “help the world connect,” you can see the resonance of Facebook as a mobile service provider. By launching an MNVO, Facebook could become the world’s largest mobile operator, allowing its users to connect via voice, and make the money its investors demand.

How much could Facebook earn as an MVNO? Facebook currently earns annual revenue per user of $4. An MNVO can earn between $10 a month and $50 a month per customer with an operating margin between 20 percent and 25 percent.




Edited by Braden Becker

Contributing Editor

SHARE THIS ARTICLE
Related Articles

Avaya Files Chapter 11, Plans Restructuring

By: Steve Anderson    1/20/2017

Avaya turns to Chapter 11 bankruptcy in a bid to make some key changes and attempt to recover for the future.

Read More

Reports of the Death of the Deskphone are Premature; Allworx Says We're on the Verge of a Deskphone Revolution

By: Erik Linask    1/19/2017

We've heard commentary about the death of the deskphone for several years now. Yet, if you look on most corporate desktops, you'll still find one. The…

Read More

Microsoft Makes AI Moves in Montreal

By: Alicia Young    1/19/2017

Recently, Microsoft has shown a growing interest in Montreal's booming artificial intelligence (AI) presence. This has spurred a series of acquisition…

Read More

What to Do About Netflix Shares

By: Steve Anderson    1/19/2017

Netflix has destroyed all estimates about its share prices, but how should investors respond?

Read More

The End of Work as We Know It: 6 Big Predictions for 2017

By: Farrell Hough    1/19/2017

The future of work in 2017 and beyond will center on using increasingly capable technologies to improve our productivity to the point where we can foc…

Read More