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Africa Helped Facebook Break Ad Revenue Records In Q4. Not Everyone Is Celebrating

Africa Helped Facebook Break Ad Revenue Records In Q4. Not Everyone Is Celebrating

Growing mobile use in Africa helped Facebook break ad revenue records in the fourth quarter of 2015 with 80 percent coming from mobile ads, according to a report in MobileMarketingMagazine.

Not everyone is celebrating. In South Africa, the top two mobile service providers, MTN and Vodacom, say data-based messaging apps are getting a free ride and it’s hurting their profits as SMS revenues fall, ZDNet reported.

They’ve asked the government to regulate and tax over-the-top service providers.

Mobile-only users grew by more than 50 percent year-on-year, and 13 percent in the fourth quarter, helped along by Google’s Internet.org project.

Internet.org provides people in some developing economies with free communication tools like Facebook, and free access to basic websites like news, job postings, health, and education information.

In some parts of Africa, mobile users think Facebook is the Internet, according to MotleyFool.

In a text messaging survey by Geopoll, 65 percent of Nigerians agreed with the statement that “Facebook is the Internet.”

Facebook earned $5.6 billion in the fourth quarter and doubled its year-on-year profits despite heavy investments in expanding its mobile ad network, along with expensive projects like virtual reality, artificial intelligence and Internet.org.

Internet.org is available in at least 20 African countries including the following: Angola (Movicel); Benin (MTN); Cape Verde (Unitel); Democratic Republic of the Congo(Airtel, Tigo); Gabon (Airtel); Ghana (Airtel); Guinea (Cellcom); Guinea-Bissau (MTN);Kenya (Airtel); Liberia (Cellcom); Malawi (Airtel & TNM); Mauritania (Mauritel); Mozambique (Mcel); Niger (Airtel); Rwanda (Airtel); Senegal (Tigo); Seychelles (Airtel); South Africa (Cell C); Tanzania (Tigo); and Zambia (Airtel).

While Google still has almost three times more revenue, Facebook is closing the gap as it accelerates its mobile ad business and begins to mine its other businesses like Instagram and WhatsApp for potential revenues, MobileMarketingMagazine reported.

“Q4 was a strong quarter and a great end to the year,” said Mark Zuckerberg, CEO of Facebook, in the company’s earnings call. “But it’s important to consider not just our business results but also how we’re improving the lives of people and communities around the world. In 2016 and beyond, we’re going to continue…serving our community, working to bring connectivity to billions of people who’re not yet connected, and building new technologies that give people more ways to express themselves.”

Zuckerberg said he plans to optimize the company’s services for people in developing countries, testing new ways for businesses to use WhatsApp, and expanding Messenger.

The social media company has upgraded its user experience with new features such as enabling users to hire Uber taxis through Messenger, VenturesAfrica reported.

“Heading into 2016, it is clear that consumers have shifted to mobile and businesses know they need to catch up,” said Sheryl Sandberg, COO of Facebook, MobileMarketingMagazine reported. “Marketers now realise that if they want to reach their customers where they are, mobile is essential. Facebook and Instagram have become the two most important mobile advertising platforms.”

A South African government committee met this week to discuss whether services such as WhatsApp and Facebook should be subject to regulation and face extra taxes for their apps to be available on the country’s mobile networks, ZDNet reported.

Vodacom in 2015 reported its first drop in annual profit for five, although SMS revenues were still $184 million for the year.

A government spokesman said a “key concern is that OTT players make no contribution to the network infrastructure.”

Representatives from Google, Facebook, and Microsoft-Skype also spoke, arguing that users already paid for infrastructure through data charges, according to ZDNet.