Google, Facebook, others to face fees to advertise to Digicel's mobile users

Digicel, a wireless carrier that counts roughly 13 million customers across 31 markets in the Caribbean and South Pacific, said it will begin blocking display and video ads in mobile web pages and in apps. The carrier said the move will reduce its customers' data usage by 10 percent. And, importantly, the carrier said it will charge companies like Google (NASDAQ: GOOG), Yahoo and Facebook (NASDAQ: FB) to bypass the block so they can deliver their ads to Digicel customers.

"For network operators meanwhile, for whom bandwidth is one of the most costly considerations, Digicel is looking to companies like Google, Yahoo and Facebook to enter into revenue sharing agreements with it so that this money in turn can be reinvested in network deployment and ultimately the bridging of the digital divide," the company said in a statement. "Currently, these companies do not pay to make use of the network and the services they provide on it suck up bandwidth to make money for themselves through advertising while putting no money in."

Digicel said it is working with Israeli startup Shine Technologies to implement the ad-blocking technology. Digicel said it will roll out the service starting in Jamaica and then will expand it to other markets in the Caribbean and South Pacific in the coming months.

"This is about giving customers the best experience and about getting access to broadband to the unconnected and allowing them to benefit from the opportunities it affords," said Denis O'Brien, chairman of Digicel Group. "Companies like Google, Yahoo and Facebook talk a great game and take a lot of credit when it comes to pushing the idea of broadband for all -- but they put no money in. Instead they unashamedly trade off the efforts and investments of network operators like Digicel to make money for themselves. That's unacceptable, and we as a network operator, are taking a stand against them to force them to put their hands in their pockets and play a real role in improving the opportunities for economic empowerment for the global population."

According to the Wall Street Journal, Google declined to comment on Digicel's move, and Facebook and Yahoo did not immediately respond to requests for comment. The WSJ also noted that representatives from Verizon (NYSE: VZ), AT&T (NYSE: T) and Sprint (NYSE: S) also did not immediately respond to requests for comment on the topic.

Digicel's audacious move is just the latest action in a rising push toward ad blocking. Ad-blocking software is available from a wide variety of suppliers on the desktop Internet, and Apple (NASDAQ: AAPL) recently introduced the technology to its iOS smartphone operating system.

Clearly, advertisers are standing up to take notice. "We need to recognize, as an industry, that this is something we need to deal with," Sridhar Ramaswamy, Google's top advertising executive, said this week of ad-blocking technology. "We need to work together to come up with a definition of what an acceptable ad is and what an acceptable ads program can be."

In comments to Fast Company, Ramaswamy explained that unpleasant ad experiences are driving the increased interest in ad-blocking tools, and he said that Google, along with the advertising and publishing industries, ought to find a fix.

Thus, it seems some wireless carriers are interested in taking up the issue directly. Indeed, the WSJ reported, citing unnamed sources, that Germany's Deutsche Telekom is also considering blocking advertising on its networks.

Digicel's action is noteworthy considering executives from some European wireless operators have previously expressed dismay that the likes of Facebook, Netflix (NASDAQ: NFLX) and other major Internet providers have direct access to mobile customers without having to pay for the cost of building that access.

For more:
- see this Digicel release
- see this WSJ article

Related articles:
European operators gear up to block mobile adverts from Google et al
With AOL purchase, Verizon now competes against Google, Facebook in ad-tech arms race
Ad blockers in iOS 9 have developers surprised and thrilled on Twitter
Apple's ad blocking heats up debate, but what does it mean for pharma?

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