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

AI's Major Role in EU's New Data Privacy Regulations

By: Special Guest    8/23/2016

Earlier this year, the European Union passed the General Data Protection Regulation - landmark legislation addressing data protection and privacy conc…

Read More

Broadband Delivered by Fiber Proves Better than Alternatives

By: Doug Mohney    8/23/2016

We're a couple years out on an unprecedented boom in broadband, with new wireless schemes, 5G, high-flying drones and constellations of satellites cov…

Read More

BYOD Could Mean Bring Your Own Disaster

By: Special Guest    8/22/2016

As adoption of wearables becomes more mainstream in the Middle East, it brings added complexity to BYOD in an enterprise. One of the more interesting …

Read More

Uber Self-Driving Cars Leave Google in the Dust

By: Alicia Young    8/19/2016

Everyone at Uber seems to be excited to get the ball rolling. Uber Chief Executive Travic Kalanick told The Wall Street Journal, "The technology is go…

Read More

Blackberry DTEK50: The Smartphone for a Hostile World

By: Rob Enderle    8/17/2016

There are certain things I'll probably never understand. One of them is how the entire market moved from phones that were secure and built for busines…

Read More