It’s no surprise that a dinner between Facebook’s Mark Zuckerberg and wireless execs at Mobile World Congress in Barcelona played out the way it did: The young CEO talked up the virtues of its $19 billion acquisition of WhatsApp, and the importance of cheap Internet access, and the carriers fretted about being reduced to a “simple pipe.”
After delivering Monday’s keynote at the wireless conference, Zuckerberg hosted a private dinner for about 20 executives, Bloomberg reports. Meals are a common way Zuckerberg interacts with others, literally breaking bread with other companies. For instance, in another such dinner, he talked over sushi to the top brass at 10 top social gaming companies that use Facebook’s platform for distribution.
This time, the tensions were much clearer.
While Facebook and carriers have a lot in common — they both help people stay connected — they do it in two completely different ways. The carriers were vocal about the need to level the playing field between the two industries. Facebook benefits from soaring mobile-advertising revenue while carriers are stuck footing the bill for a network that Facebook operates on for free.
Even more worrisome for carriers is that services, like WhatsApp, threatens the way they make money. WhatsApp allows users to side-step costly texting plans by sending messages over their data connection for cheap or via Wi-Fi for free.
Orange’s CEO Stephane Richard, who attended the dinner, summed up the concerns to Bloomberg succinctly: “The risk for us is being excluded from the world of services. If that happens, we’ll be downgraded to simple pipes.”
This is the same concern the carriers have had for more than a decade. For as long as I can remember, operators have only been successful at building out core telecom infrastructure to support services, like calling, texting and Internet access, while everyone else has come up with ways to exploit those pipes.
“A service like WhatsApp, to be honest, that’s something we could’ve and should’ve come up with before. We’re well decided to catch up,” Richard told Bloomberg.
I couldn’t have said it better myself.