Original URL: https://www.theregister.com/2014/02/24/zuckerberg_wants_free_onramp_to_internet_for_worlds_developing_economies/
1bn down, 6bn to go: Zuck to grow Facebook by touting 'free internet onramp' for the poor
WhatsApp was a bargain, NSA spying had benefits
Posted in Networks, 24th February 2014 21:31 GMT
MWC 2014 Mark Zuckerberg has used his keynote address at this year's Mobile World Congress to expound on his rough plan to expand basic internet services to all humanity as a human right, and then sell them something on the back of them.
He told the Barcelona audience that Internet.org – a partnership between Facebook and mobile technology giants to provide free internet access globally – has run trials with network operators to offer a "free onramp" to the internet to get people online: this includes offering zero-cost internet messaging, search and (of course) social networking.
"[The world is] really not on a path to connect everyone unless something pretty dramatic changes. After Facebook reached this milestone of connecting a billion people, we took a step back and said, 'well, what problem can we help solve next?' Our vision isn’t to connect a seventh of the world's it's to connect everyone," he said.
There are more than five billion mobile phone owners, but only 2.7 billion internet users he said, and the pace of growth is too slow. While 80 per cent of mobile users have access to a 2G or 3G network, many are not even trying to get online. Zuckerberg reckoned a free service would provide a gateway for them to experience the internet and lure them into buying subscriptions or services.
So far there have been trial runs in the Philippines and Paraguay, he said, and internet use had jumped 50 per cent in a very short timeframe. If adopted, Internet.org's plans could increase the global internet population by more than a billion in the next five years, and by another two or three billion within a decade.
Zuckerberg said his board was cool with him pumping the company's money into the plan because "they get it," and while it will initially cost a lot, the future benefits are going to be huge in terms of increased revenue from internet users – both from Facebook and for the carriers involved.
In order to make all this happen Zuckerberg said the cost of internet access has to be reduced by smarter servers and services. Thanks to the Open Compute Project, Zuckerberg said that a 10-times increase in server efficiency was easy to get, and in the coming years he predicted a 1,000-times improvement.
As important is the economy of data, Zuckerberg said, and Facebook was contributing its own expertise in this area. Last year the average Facebook user downloaded 14MB of data a day from the social network, but the company has cut that to 2MB this year and has a firm plan to get 1MB, without changing the user experience, and was willing to tell others how to do so.
Techniques used to achieve this include better photo compression and analyzing what device is requesting data and only sending what was the optimal information needed. By applying these techniques to other services network operators could slash their data-handling costs by 50 per cent and run a set of online services like over-the-top messaging (OTT) for free to spur market growth.
"Whether operators will buy into Facebook’s vision remains to be seen. Zuckerberg’s proposal is Facebook-centric, with the social network and OTT players reaping the immediate benefits," said Eden Zoller, principal analyst at Ovum.
"The direct monetization prospects for telcos are thin, a point Zuckerberg admitted by conceding the model needs fine tuning to strengthen the business case for operators. There are of course indirect benefits to carriers, such as the increased mobile Internet usage and subscriber gains experienced by Globe Telecom, but the question remains as to whether this will be enough to counter the negative impact OTT services are having on operators."
To make applications better for users in environments where good data connectivity is hard to come by, Zuckerberg said that later this year Facebook and Ericsson will set up a laboratory at Menlo Park, California, for Internet.org to develop better communications software. The lab will use Ericsson's kit to simulate a developing economy's network and run tests on how well applications run in that environment.
"Once people running companies have the experience of running their application in these conditions, which a lot of folks in the US and Silicon Valley have never seen, you really come away with an empathy for what you're subjecting the people you're supposed to be serving to, and what a bad experience that could be, which really incentivizes you to make it more efficient," he said.
WhatsApp's bargain $19bn price, the NSA effect, and Snapchat
Speaking of applications, Zuckerberg was also asked about the $19bn that his firm paid for WhatsApp last week. Far from being defensive, Zuckerberg said that $19bn was a bargain for a company that was connecting so many people and that had the potential to reach billions.
"Just by itself it's worth more than $19bn," he opined. "It's hard to make that case today because they have still got little revenue compared to that number, but the reality is that there are very few services that reach a billion people in the world and they're all incredibly valuable.
"I could be wrong: there is a chance that this is the one service that that gets to a billion people and ends up not being that valuable, but I don't think I am. You can look at other messaging apps out there that are already monetizing at a level of $2 to $3 per user with pretty early efforts and that shows that this is going to be a huge business."
The big advantage for WhatsApp in the deal, he said, (besides making its staff very, very rich) is that the firm can use Facebook's resources to concentrate on improving the application while Zuckerberg's crew focus on building its user base.
One of WhatsApp's advantages is that the service doesn't actually store much data and once a message is sent it will be deleted from the company's servers. Zuckerberg said this would be popular with users, and the issue was referenced later when the behoodied one was questioned about the effect of the NSA spying revelations.
'I do feel like a lot of the industry is a lot more aligned'
Zuckerberg described the NSA's data collection practices as "not awesome," and said that the US government "blew it" when it decided to go down the mass surveillance route. He said the intelligence agencies had gone way over the line with no transparency of operations and the whole issue had been badly managed.
But there had been a serious benefit for the industry he said; normally fractious technology rivals had been so angered by the NSA's activities that they had banded together and were cooperating as never before.
"We've had issues historically about working with some of our competitors on policy issues that even help the whole industry, like pushing the internet forward," he said. "But now it is such an important thing, because of how extreme some of the NSA revelations were, that now I do feel like a lot of the industry is a lot more aligned."
Finally, Zuckerberg was questioned over his plans for Snapchat, which turned down a $3bn buyout offer from Facebook last year. He replied with a long pause followed by "no comment," but then said that after making a purchase as large as WhatsApp, it was probably time to stop buying any more firms and concentrate on what you've got. ®