Mark Zuckerberg's newest endeavor has ruffled feathers in the telecom business. On Monday, he tried to make amends.
During the keynote speech at Mobile World Congress, in Barcelona, the Facebook CEO defended Internet.org, the company's bid to spread web connections worldwide. Critics say the initiative benefits from wireless operators' infrastructure investment. Mr. Zuckerberg began his talk praising the carriers and downplaying Facebook's efforts, including its attempts to deploy satellites and drones for internet connection.
"While it's sexy to talk about satellites, the real work happens here. We're not really the ones leading this," he said. "The real companies that are driving this are the operators."
With Internet.org, the social media behemoth partners with a wireless carrier to package Facebook's apps with others and "zero-rate" them, or exempt them from data billing, in perpetuity. The app has launched in six countries since July. Facebook's earlier attempt at the practice, a stripped-down version of its platform, called Facebook Zero, met sizable carrier resistance, particularly after its acquisition of WhatsApp, the messaging app that circumvents operator charges.
Mr. Zuckerberg fended off criticism, claiming that services like WhatsApp increase data usage, a major talking point in his evangelism for Internet.org. "These apps drive data usage," he said. "And that's the future."
Facebook, along with Google, is facing increased political scrutiny in Europe. Earlier on Monday, Tim Hoettges, CEO of Deutsche Telekom, Europe's largest telecom by revenue, declared that Google, Facebook and other web companies should be regulated like telecommunications businesses.
The social media CEO did not wade into the issue. "I don't have too much to add, because I'm not a regulator," Mr. Zuckerberg said.
To make his case for Internet.org, Mr. Zuckerberg brought three telecom executives on stage who have worked with the global service. They all said the offering has pulled in subscribers. Mario Zanotti, SVP at Millicom, said the service led to a 50% increase in new data users in Colombia, in its first three weeks. Yet none would specify revenue gains. "We have not seen yet adverse effect," said Christian de Faria, CEO of Airtel Africa. "I've not seen an erosion of ARPU [average revenue per user]."
Mr. Faria has been skeptical of Facebook in the past. A year ago, he said, he had an uglier opinion of his current partner, drawing an analogy to "the beauty and the beast." Now, he said: "I think the beast is becoming more human."