Facebook wants to embrace mobile carriers instead of compete against them

Facebook SuperCell
Facebook isn't looking to compete against service providers, but rather partner with them to enable internet connectivity to areas or countries that are under-served or have no access at all. (Facebook Connectivity)

Despite concerns to the contrary, Facebook has no ambition towards being a wireless operator, ISP or any other kind of hardware or software supplier.

Speaking during a keynote address at Thursday's FierceTelecom Blitz Week, Facebook's Dan Rabinovitsj said the social media company wants to partner with players in the telecommunications industry and not compete with them.

"I'm so happy to dispel this rumor, because it is, it is something that comes up very frequently," said Rabinovitsj, vice president for connectivity, when asked if Facebook plans to compete against mobile operators. "But the reality is we're really good at building networks for our own use.

With more than three and half billion people around the world not connected to the internet, Rabinovitsj said Facebook's goal is to connect them by partnering with service providers through Facebook Connectivity.

"Facebook Connectivity really is at the heart of Facebook's mission, which is to bring people closer together and connect people all around the world," he said. "One of the things that we realized is that actually getting people online to the internet, and also improving the speeds of the network once they're online, is really critical. There's a very clear business strategy and rationale for us to be investing this way."

While Facebook is putting a lot of cash and effort behind adding or improving internet connectivity in places such as a Africa—for its own benefit of signing up more users—its efforts have benefited the telecommunications industry and internet users. With the Covid-19 pandemic, Rabinovitsj said providing internet connectivity has taken on added importance.

Facebook is behind telecommunications entities such as the Open Compute Project (OCP) and the Telecom Infrastructure Project (TIP), but it also provides support on a more granular level.

RELATED: Facebook Connectivity aims high with SuperCell for rural coverage

Rabinovitsj said Facebook could lend a hand by accelerating activities such as technology innovation or business model innovations, as well as implementing DevOps on the back end.

"That's what makes this job very, very exciting and very motivating for the people that are in Facebook Connectivity," he said. "But it's also very challenging, because unlike some of our peers, we're not trying to be a mobile operator. We're not trying to be a service provider. We're not trying to be a hardware or software supplier. We're really trying to partner with the entire ecosystem."

As further proof of Facebook working with service providers, its model includes sharing, on a peering cost basis, its fiber with other services. Sharing its fiber assets in underserved areas or countries of the world leads to the creation of much needed local internet exchanges.

"We do deploy a lot of fiber," he said. "What we try to do is every time we're pulling fiber for a production use for a data center we try to share that access with other companies. We share fiber assets wherever we can so that other companies can come in at an incremental cost to basically get pairs of the fiber for them at the lowest possible cost. We share all of the infrastructure that we can, and this is kind of a common theme for us because sharing is a big part of bringing the cost down."

Rabinovitsj said Facebook's Internet para Todos Peru (IpT Peru) project, which was launched in 2019 and is co-owned by Telefónica, IDB Invest and CAF banks, was an experiment for working with partners to launch a rural network-as-a-service in Peru. Facebook and its partners share the assets, all of the operational expenses and the capex to deliver an affordable, sustainable service to remote communities.

"We're excited because we're going to go try a few of these things in other parts of the world soon," he said. "But again, the principles are based on shared network economics, driving costs down and allowing partners to scale these concepts around the world."

Rabinovitsj said Facebook was building a business model that was open and transparent. The blueprint includes sharing all of the information with banks and other operator partners to show them that these types of rural deployments are feasible. Over the long run, Rabinovitsj said Facebook plans to exit those partnerships because it doesn’t typically do equity investments.

"So one of the key things is we're not competing with the incumbent mobile operators in their core markets," he said. "We are basically focusing that effort in rural communities where it's been typically very hard to close a business case. The principles are based on shared network economics, driving costs down and allowing partners to scale these concepts around the world."