Facebook will “maximise mobile revenues” at the expense of operators as it tries to justify the huge price tag associated with its upcoming public listing, according to an M&A advisory firm.

Victor Basta, MD of tech-focused Magister Advisors, said the IPO, which could happen next month, was “about the worst thing” that could happen to mobile operators.

Specifically, Basta claims that Facebook will be under intense pressure to justify its $100 billion valuation.

“With revenues below $4 billion, Facebook will have to make rapid progress to achieve the $30 billion in revenues that will support that valuation,” he said.

Much of the required additional revenue will come from mobile, making it more difficult to share significant revenue with operators, according to Basta.

This is despite the fact that Facebook has repeatedly said that it wants partnership with operators.

At Mobile World Congress in February, Facebook CTO Bret Taylor said the social networking giant would help to redefine operators' business models.

However, while Basta agrees that Facebook wants to position itself as more “operator-friendly” than Google or Apple, the harsh reality of Wall Street’s quarterly expectations mean such promises could turn out to be empty.

“Facebook is a textbook example of an over-the-top technology and is effectively turning mobile network operators into digital drug mules,” he said.

Operators do have some leverage given the role they play in enabling Facebook to monetize users on the move.

“The challenge will be leveraging the power of that position by finding a way to work within the ecosystem rather than ‘giving it away for free’ while helping Facebook grow in value,” concluded Basta.

Have you taken our new quarterly survey on Big Data? Click here to take part.

 

More News

T-Systems is first to offer ngena’s SD-WAN product T-Systems is first to offer ngena’s SD-WAN product T-Systems has launched the first product powered by ngena, the global network alliance for enterprises. More detail
Google spends $1.1 billion on HTC hardware talent Google spends $1.1 billion on HTC hardware talent Google has stepped in to prop up HTC and hire some of the Taiwanese manufacturer’s engineers to boost its hardware ambitions. More detail
BT, Hitachi team up to develop IoT solutions for enterprises BT, Hitachi team up to develop IoT solutions for enterprises BT has signed a partnership deal with a new subsidiary of Hitachi to develop IoT solutions for their respective enterprise customers. More detail
Telenor set to complete divestment of VEON stake Telenor set to complete divestment of VEON stake Telenor has hailed the parting of financial ways with VEON as it announced plans to dispose of its remaining stake in the company. More detail
Telekom Austria to roll out A1 brand across all its markets Telekom Austria to roll out A1 brand across all its markets Telekom Austria Group (TAG) is rebranding all of its opcos as A1, as it looks to capitalise on the trading name’s success in its home market. More detail
    

@eurocomms