By Ryan Knutson and Sam Schechner
Mark Zuckerberg is trying to mend fences with the telecom
industry.
Facing criticism from carriers that say Facebook Inc. is hurting
their business models, Mr. Zuckerberg struck a conciliatory tone
Monday, saying the only way to expand Internet access around the
world is if carriers' revenue grows too.
"It's really important not to lose site of the fact that the
real companies that are driving this are the operators," the
Facebook CEO said at the telecom industry's main annual conference
in Barcelona.
The comments appeared to address concerns that Mr. Zuckerberg's
crusade to extend the Internet to billions more people is at odds
with Facebook services that undermine operators' revenue from phone
calls and texts.
"It's expensive work," Mr. Zuckerberg said Monday of efforts to
build cellphone networks. "The only way we can accelerate that is
if we can grow the operator's business faster."
Mr. Zuckerberg was joined by executives from three operators--
Telenor Group, Millicom International Cellular SA and Airtel--who
have been giving subscribers free access to Internet.org, an app
developed by Facebook that includes access to local content like
weather and health information, in addition to a slimmed down
version of Facebook.
Christian De Faria, the CEO of Airtel Africa, said the company's
relationship with Facebook has improved over the past year. The
Internet.org app has helped acquire new customers.
Last year, it was "like the beauty and the beast," he said,
hinting that Facebook was playing the role of the beast. Now, he
said, "the beast is becoming more human."
Mario Zanotti, an executive at Millcom, said the company's
operation in Tanzania has seen a tenfold increase in sales of
smartphone since it launched the Internet.org campaign.
Yet there are still tensions. Telenor CEO Jon Fredrik Baksaas
told Mr. Zuckerberg on stage that the company's $19 billion
acquisition of the popular messaging app WhatsApp last year is a
"point of tension," because text messages still provide an
important revenue stream.
"This is a kind of issue between telco groups, I speak for
myself now, and Facebook," he said, adding that the deal gave
operators pause before joining in on the Internet.org initiative.
"Every company would be careful to deliver the key to the house to
your competitor."
Mr. Zuckerberg acknowledged threat from messaging and said that
is why Internet.org app doesn't include the ability to make voice
calls over the Internet, which would be a threat to operator voice
revenues.
Write to Ryan Knutson at ryan.knutson@wsj.com and Sam Schechner
at sam.schechner@wsj.com
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