Mobile operators face increasing Facebook threat

Mobile operators face increasing Facebook threat

Summary: Service providers "slow to wake up" to competition from Facebook, which efforts have been focused beyond social networking and into mobile and location-based services, notes industry analyst.

SHARE:

Mobile operators are underestimating Facebook as a formidable competitor which recent efforts have seen the social networking site expand its presence into voice communications, location-based services and mobile advertising.

According to an Ovum report released Tuesday, since making its first move into the mobile platform in 2006, Facebook is now "a force to be reckoned with" where more than 200 million users today interact with the social network via their mobile phones.

Eden Zoller, principal analyst with the research firm, wrote in the report that the Internet giant is beefing up efforts to be a platform from which users communicate as well as consume and share information--regardless of where they are, and which device they use.

He noted that Facebook made several moves that placed the company in competition with mobile operators, including its integration deal with Skype for voice communications, and the launch of its e-mail service in November 2010.

It also unveiled a location-based service via Places and is currently looking at mobile advertising via the Facebook Deals check-in service.

"Facebook is encroaching directly on mobile operator territory and should not be underestimated," Zoller cautioned. "However, operators are being slow to wake up to the extent of Facebook's ambitions and tend to view it as benign, non-competitive presence that they are keen to form partnerships."

The Ovum analyst also pointed to speculation that the Internet company had plans to release its own phone, which he said could serve as "the final piece of the puzzle". However, Facebook had refuted such claims.

Zoller added that even though Facebook is unlikely to unveil its own mobile phone, it could be keen to work with partners to develop a customized device platform. "This would in effect make Facebook a social operating system," he said.

The analyst noted that mobile operators will be interested in establishing alliances with the social networking site, for example, by offering easier access to its service and enabling address book integration.

Zoller said: "While there are good reasons why operators should wish to partner with Facebook, they should be more alert to the fact that it is shaping up to be a strong competitor. It is only by understanding Facebook fully that operators can engage with it effectively, be that on a collaborative or competitive basis."

British startup INQ Mobile earlier this month announced plans to release a new Android-powered phone with tight integration with Facebook, which include features such as Facebook-related buttons on the homescreen and Facebook friends integration with contacts.

There are currently over 500 million active Facebook users globally, 70 percent of whom are based outside the United States.

Facebook users that access the site via their mobile devices are twice as active as those who do so via non-mobile platforms. Over 200 mobile operators in 60 countries deploy and promote Facebook mobile products.

Topics: Software, Apps, Browser, CXO, Mobile OS, Mobility, Networking, IT Employment, Social Enterprise

About

Eileen Yu began covering the IT industry when Asynchronous Transfer Mode was still hip and e-commerce was the new buzzword. Currently based in Singapore, she has over 16 years of industry experience with various publications including ZDNet, IDG, and Singapore Press Holdings.

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

2 comments
Log in or register to join the discussion
  • its nice
    wasenew
  • It is interesting to read that Facebook has grown so much in popularity that it has the potential to challenge mobile operators. As Facebook expands its offerings and smartphones become more popular among consumers, users without these advanced devices will unfortunately be left in the dust. To help alleviate this problem, perhaps one could consider using SMS to keep mobile users connected to social media. My company, Cherple, uses SMS technology to keep the 5 billion mobile devices on the market connected while not consuming massive amounts of data or requiring advanced application capabilities. SMS technology provides the perfect means to keep non-smartphone users engaged in social networking while on the go, by easily communicating between an online device and a mobile phone. The Cherple platform is not only a great social media tool for users, it is appealing to advertisers, as we can offer in-text ads, which ensure views, unlike the haphazard banners you see on popular Web-based social networking sites. Thanks for the great read!
    RobertSanchezGTM