Facebook and Finance - friends of ours?

It’s not often that leading figures from one industry care to enter the inner sanctum of another to lay out some home truths. It happened twice this week in Dublin at TM Forum’s Management World and it got The Insider thinking.

Uber-successful serial entrepreneur, Nick Ogden, when discussing how the payments and banking world were addressing mobile market, suggested that telcos may have ‘missed the boat.’ Apart from a limited number of scattered initiatives at national level there is yet to be seen an industry-wide offering that includes the leading financial institutions and the telecoms industry as a whole.

Ogden also suggested that brands like Visa and MasterCard as international brands are instantly recognizable but that the telecoms industry does not have a universal brand or identity that matches them in terms of instant recognition as a payment method. Any hope of success would rely on partnerships with the credit card processors and their issuing banks, especially where NFC (Near Field Communications) devices are concerned.

News that Google has joined forces with Citi and MasterCard to embed NFC capability into the Android powered Nexus S handset must be sending shivers down mobile operator spines. Where, in that model, do the mobile operators play any part, except for providing the network to manage the device and facilitate the transactions.

The appearance of Colm Long, Director of Online Operations for Facebook in EMEA was, in retrospect, quite a coup. Long, of course, articulated the success of Facebook in terms of growth and usage and its spread to all corners of the globe that are serviced by any form of communications. The future growth and continued success of Facebook is predicated on communications, increasingly mobile, in the developing markets.

Long also emphasized the need for partnership with CSPs and that many had been using Facebook as a marketing weapon to attract subscribers by offering Facebook access free. He mentioned a few times that Facebook was happy to work with operators but did not articulate how those relationships might work out.

Facebook is also commercializing itself at an extraordinary rate. Apart from the effect of personal recommendations amongst friends, which is viral in nature, many corporations now have sites on Facebook and work with Facebook to create promotions and stimulate traffic by offering members special offers that also become viral. There has also been massive growth in the number of applications and games available on Facebook that are being taken up.

One wonders if telcos have not ‘missed the boat’ in both scenarios. What the ‘partnerships’ both speakers spoke about will look like remains to be seen. CSPs wishing to promote their services on Facebook as a customer of Facebook will certainly be welcomed, but Facebook being willing to share its revenues with network operators because they provide the communications is highly unlikely.

One possible, even remote, possibility raised by one astute attendee at the keynote presentations of Ogden and Long, was that potential partnerships may take the shape of OTT players like Facebook, Google and even Apple, becoming virtual network operators (VNOs).

Don’t laugh. If you were a network operator and one if them approached you with this option, would you turn them away? Let me see, I’m a network operator and today I get no revenue from them, and there is the strong possibility that they would cannibalize my core business, and they would be very hard task masters, etc. etc., but what choice would I have?

Maybe this is the type of partnership Colm Long had in mind but could not share publicly?