Thursday, 22 August 2013

Facebook creates Internet.org alliance to reduce price of mobile data plans to 1% of current price

Facebook creates Internet.org alliance to reduce price of mobile data plans to 1% of current price

 In one of the most admirable but least altruistic moves ever, Facebook CEO Mark Zuckerberg is heading up Internet.org, a new global partnership that aims to bring down the cost of mobile internet access, and to connect the roughly four billion inhabitants of Earth who still don’t have access to the internet. The primary goal, of course, is to ensure a steady stream of new customers — and thus an increases in stock market valuation — for the members of the Internet.org alliance, which includes Qualcomm, Samsung, and Nokia, among others. We shouldn’t ignore the huge range of benefits that internet access can bestow on under-connected communities, though: From access to news and educational materials, to communicating with distant friends and family, internet access can be life-changing.

Here in the developed world, internet-oriented companies such as Facebook are facing an interesting problem: Market saturation. Whether it’s via wireline services (Cable, DSL) or wireless (smartphones, tablets), almost the entirety of the US, Europe, and the rest of the developed world  is connected to the internet — and most of them use Facebook on a scarily regular basis. As of June 2013, Facebook had 1.15 billion monthly users, with 699 million of those using the service on a daily basis. Those are some truly awesome figures, and you’d think that Facebook and its share holders would be happy, but the sad truth is that Facebook has grown too big too quickly. With 1.15 billion users, and only 2.4 billion people connected to the internet — many of which use social networks that are popular in their own country, such as Vkontakte in Russia and Renren in China — Facebook is quickly approaching saturation point.

When Facebook saturates the market, its user growth will slow to a crawl, and its revenue growth will eventually follow suit. For Facebook itself, this isn’t such a huge problem — but for the stock market, which only really cares about growth and growth potential, this is a Bad Thing. And Facebook is just one example: There are a lot of internet-oriented companies, such as Amazon or Google, that are growth-capped by the number of internet users.
The answer, as far as Mark Zuckerberg is concerned, is to connect more people to the internet. To do this, Facebook seems to have corralled half a dozen of the world’s tech and telecoms giants, including Qualcomm, Samsung, Nokia, Ericsson, MediaTek, and Opera, into a coalition and called it Internet.org. The end goal is to get most of the world connected to the internet, and judging by the companies involved, the coalition’s effortswill be almost entirely wireless- and mobile-oriented. This makes a lot of sense, as there are almost seven billion devices connected to cellular networks worldwide (almost one cellular device per person), but still relatively few that are connected to the internet.


To spur internet usage and connectivity in under-connected regions, the group’s first goal is to cut the cost of mobile internet access to just 1% of its current cost within five to 10 years. This, combined with efforts to reduce the price of dumbphones and smartphones, plus working with carriers to offer free access to services such as Facebook, Twitter, and Google, should work wonders. (See: The dumbphone strikes back.) The New York Times cites Philippines carrier Globe Telecom as a good example of this approach, which has gone from 0% of its 37 million users subscribing to a mobile data plan, to 20% in just two years by offering free access to certain online services. There are lots of small changes, such as reducing power consumption (and thus increasing battery life), reducing the amount of internet traffic required by certain apps, and reducing the cost of infrastructure, that would make internet access in the developing world a much more feasible proposition.
Moving forward, there are scant few who would denounce such noble efforts to bring internet access to the under-connected — but at the same time, it’s important to keep everything in perspective. As Bill Gates succinctly put it, ”When a kid gets diarrhea, no, there’s no Web site that relieves that.” Internet.org also doesn’t appear to be interested in the long-haul backbone links between the developed and developing worlds, instead focusing on local infrastructure — not a deal-breaking flaw, but definitely not ideal. One of the key reasons that the developing world is taking so long to come online is due to its cripplingly slow links to the Internet Prime; after all, what good is DSL or a mobile to of � f e @ 7� to services such as Facebook, Twitter, and Google, should work wonders. (See: The dumbphone strikes back.) The New York Times cites Philippines carrier Globe Telecom as a good example of this approach, which has gone from 0% of its 37 million users subscribing to a mobile data plan, to 20% in just two years by offering free access to certain online services. There are lots of small changes, such as reducing power consumption (and thus increasing battery life), reducing the amount of internet traffic required by certain apps, and reducing the cost of infrastructure, that would make internet access in the developing world a much more feasible proposition.