Operators Opinion

If an operator is charging users for Facebook roaming, should they pay a license fee?

This post ties rather neatly in with my previous one (Would you pay €2 to use Facebook on the beach?) regarding roaming.

Now then, what happens if operators were to deploy these rather innovative plans such as the one mentioned above? It’s a topic I’ve been exploring whilst I’ve been on-site at MACH Insights 2011.

I explored this question in another video thus:

I could imagine many consumers simply loving the flexibility of being able to upload photos, reply to messages, add status messages and so on, whilst on holiday. There must be millions of people who simply do not bother because they are afraid to bill shock — or they’ve already learnt an expensive lesson about roaming abroad.

If operators charged for the service fairly and transparently, I think consumers may well respond positively to it. One of the key points about service-based charging (i.e. Youtube, Facebook, Google Maps Navigation) is that consumers understand it. They get it. They know what it means. Nobody knows what 1mb means.

However, let’s just assume one particular operator was really, really successful with a Facebook-style roaming offer. Remember it’s stupidly-easy to target consumers. You just need to modify your introductory welcome text message accordingly. You could even prioritise customers on higher price plans or who have a history of using Facebook domestically but who suddenly stop using it whilst abroad.

Assume that, I dunno, 2 million customers go on holiday in a given month.

1 million of them opt in for the service and actually end up spending a tenner each (say 5 days x €2) for Facebook. That’s a cool €10,000,000. Factor that up across an operator group with, say, 10 similar geographies. We’re now at €100m additional revenue.

Still with me? Suspend your disbelief whilst I continue the example, I know there’s plenty of holes. Let’s assume that the operator can achieve these revenues fully during one quarter (the summer months) and then only 25% during the rest of the year.

3 summer months = €300m.

9 months at 25% of €100m (9 x €25m) = €225m.

Stick it all together and we’re over half a billion Euro at €525m revenues.

Now as I said, there are plenty of holes. Plenty of holes. I’ve made a ton of assumptions.

But I think the point is still valid.

At what point does Facebook think it deserves a bit of that revenue?

By Ewan

Ewan is Founder and Editor of Mobile Industry Review. He writes about a wide variety of industry issues and is usually active on Twitter most days. You can read more about him or reach him with these details.

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