Mobile operators face increasing Facebook threat

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.

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.