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Partnering with
Facebook
Blessing or Curse?
Users want the services they know and love – on their PC and on their phone. Accordingly,
established Internet players such as Google, Yahoo, Facebook, and Twitter are at the center
of user migration to the mobile environment. Mobile versions of their services are becoming
the primary drivers for widespread adoption of mobile data services. In the U.S. mobile
devices already serve as social network access points for 20% of the young users (16 to 24
years). In “mobile first” markets, such as Indonesia, South Africa, and Kenya, this number is
approaching 60%.
The collaboration between carriers and service providers thereby typically revolves around
four areas: accelerating the uptake of mobile Internet portals and applications; linking web-
based services to traditional revenue drivers, such as SMS-based messaging and data
access; leveraging a partner’s brand-strength in joint marketing activities; and coordinating
joint device strategies. Early findings from over 250 carrier collaborations worldwide with
Facebook in these areas are encouraging. Leading operators are promoting joint entry-level
offerings to create significant cross- and up-selling potential for mass market adoption of
mobile data services.
Collaboration Strategy
No Entry-Level Up-Selling
Partnering Services Potential
Low risk, low bandwidth, and low cost Internet services lower the barriers for new users to
adopt mobile data applications. These services may include for example entry-level bundles
for social media, productivity, or entertainment services. Such services are light-weight as
they typically do not contain multimedia content and are optimized for entry-level data usage.
For instance, “Facebook Zero” offers a text-only version of Facebook’s mobile site.
Embedded images and videos are replaced by links to the fully-fledged multimedia version of
the site. The text-based version of the portal is free to the end user. Revenue is generated
by charging users for clicking on links to access multimedia content, e.g. through the links to
a friends’ photo gallery or to other services, applications, games or external portals.
User demand for such highly interactive mobile Internet services is impressive, e.g.
Facebook’s mobile sites and applications account for 45% of total time spent online on
mobile devices. Carriers may benefit from co-marketing, i.e. using the partner’s brand,
showcasing key product features or devices, or highlighting value or pricing of data and
devices, to leverage the service provider’s brand strength in customer-facing mobile data
services. For example, a viral campaign targeted at a Eurasian carrier’s subscribers to vote if
they wanted to get free Facebook-browsing for a month resulted in more than one million
votes. Promotion of popular services by Internet players in sync with operator marketing
activities can also open the door to up-selling of higher-volume data bundles. A German
network operator found that a joint promotion campaign led to an immediate 20% increase in
mobile browsing usage (post promotion).
Web-based services are increasingly being integrated natively into the device. Examples
which are already found as standard features on modern smart phones include social
network contact integration into the on-device address book or direct uploading from the
phone’s camera to the social network profile. As applications and devices are being
integrated further, competences in managing the customer, device, and application portfolios
require alignment. Leading operators have benefited from bundling collaboration
competences in dedicated partnering teams. Special units that are exclusively focused on
managing partnerships can scale with the complexity of the ecosystem, as collaborating with
third-party Internet application providers is increasingly becoming more of a question of how
rather than if.
Extracting maximum value from partnering with Internet players requires a pragmatic
approach. Decision-makers need to consider:
The most popular applications on the mobile Web are Internet services that users are
familiar with. Due to impressive user bases – Facebook today has over half a billion
members – social networking accounts for nearly 25% of all time spent on the Internet.
While scale tends to favor the most popular services, Facebook is not the only service to
see rapid growth. Although growing from a much lower user base, the business social
network LinkedIn increased its user community by 96%, Twitter by 56%.
Leading operators profit from actively steering the transition to mobile data services.
Entry-level bundles provide access to ultra light-weight, fast, mobile, and cheap text-only
sites, keeping data usage low. Further revenue potential lies in offering access to
multimedia content for additional charges.
Leverage the partner’s brand through co-marketing. Picking the right and relevant
partner that resonates with the operators’ customer base is crucial. This should include
aligning the device portfolio with flag-ship applications and innovative services.
Local and contextual factors need to be taken into consideration when formulating a
sustainable, long-term partnering strategy:
Ensure alignment. Your partnering approach needs to harmonize with the overall
business strategy. Consider market maturity and customer segmentation, strategic
positioning of successful proprietary customer-facing Internet applications, ARPU
expectations, etc.
Start small. Scale up from partnering with strategic partners as the basis for formulating
a more comprehensive and coherent collaboration strategy. Managing the partnering
ecosystem through an organizational entity dedicated to partnerships is essential for
building an attractive mobile applications portfolio. Consider innovative services of over-
the-top players to complement partnering concept.
Time-to-market remains key. Innovation in mobile data services is fast-paced; well
executed partnerships with the right partners can be a catalyst for short-term user uptake
and a basis for long-term growth.
The authors
Daniel Kellmereit
daniel.kellmereit@detecon.com
Jan Steglich
jan.steglich@detecon.com