Facebook CEO Mark Zuckerberg had dinner in Barcelona with several wireless carrier executives, many of whom are clearly terrified of his $19 billion acquisition of the WhatsApp messaging service. The event was "private" and many of its guests declined to identify themselves, according to Bloomberg.
They're scared for two reasons: First, users can send messages for free on WhatsApp using wifi — thus completely bypassing the need to use wireless carriers' expensive mobile phone data plans. It renders the wireless carriers' traditional SMS texting services pointless, and removes Facebook and WhatsApp's 1.2 billion and 450 million respective users from their text messaging ecosystem.
Second, the carriers must continue to pay for the wireless infrastructure on which Facebook and WhatsApp sit — even though neither company has spent a penny to build it. Zuckerberg is creating a world in which Facebook provides people with free services and creams off the ad revenue, and the carriers are stuck with the bill.
Long the titans of the mobile landscape — carriers are the people you pay up to $100 a month just to text and talk — they're now looking at a Zuckerberg-world in which they are "downgraded to simple pipes,” as one of the dinner guests put it.
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