Facebook woos mobile networks for payment service

29/02/2012

Facebook has outlined plans to team up with mobile operators on payments, offering to give them back part of the revenue and influence they have lost to Apple and Google in recent years. Speaking for the first time at Mobile World Congress, the mobile industry's biggest gathering, Facebook said operators could help it make money from its hundreds of millions of mobile users buying games or music on the social network.

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Mobile operators have been increasingly sidelined by internet companies, which often appeal directly to consumers, hog network capacity with bandwidth-hungry services like YouTube, and compete with the telcos' own products.

"Facebook and mobile were made for each other," chief technology officer Bret Taylor said, echoing then-Google chief executive Eric Schmidt's first overtures to the industry at the Barcelona event two years ago.

Facebook said earlier this month in its filing for an initial public offering more than half its 845 million active users accessed its site from a mobile device.

It has yet to figure out how to make money from mobile - the vast majority of its $US3.7 billion revenue last year came from ads delivered to desktop users.

That mobile is central to Facebook's future success is clear, but whether it will prove a valuable partner or a value-destroying competitor to mobile operators is less so.

Facebook has a popular messaging service that allows users to have group chats and exchange photos and video in real time for free, which is drawing users away from SMS text services offered by telcos.

The billing alliance includes eight major carriers such as Spanish group Telefonica, US operator AT&T and Japanese company Softbank.

Operators could also help Facebook make money from users of more basic phones in emerging economies such as India and Nigeria, many of whom do not have access to app stores or own credit cards to make online purchases.

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