A Free Facebook Smartphone?

Apparently Facebook has asked carrier giant Vodafone for an arrangement under which its users can access the social network, perhaps without any charges against their users’ wireless plans. Facebook may have been turned down. Now, the question is how far it will go to extend access to its network, which may help it build membership in emerging nations and build loyalty in the countries that are its strongholds. One option is to give away a free smartphone, or underwrite part of its cost, as a means to offset customer subscriber costs.

According to the Financial Times:

Facebook and other internet content providers are pressing mobile operators to give subscribers in some markets special access to their content, Vodafone revealed on Monday.

The carriers have to risk a backlash from customers who do not want to pay to access Facebook via data charges. The carrier versus content battle has moved from cable and satellite television to the wireless world. A number of cable networks — most recently the Weather Channel — have argued they pay too much for carriage and that this raises the overall fees subscribers have to pay to, in the Weather Channel’s case, DirecTV (NASDAQ: DTV).

Facebook cannot afford to give away smartphones on its own. The cost to buy even cheap ones could be several dollars. The option, therefore, may be to join with other content providers that do not compete with it directly. First among these are probably video products, which eat up huge amounts of data and likely drive up monthly subscription costs considerably.

Facebook’s natural partners, therefore, are companies that already have paid customers, like Netflix Inc. (NASDAQ: NFLX) and paid television networks. Cheaper access to their services should raise the odds that people will buy them.

Carriers are already on defense because of a rate war. T-Mobile US Inc. (NYSE: TMUS) cut rates. AT&T Inc. (NYSE: T) followed. Data plans, which were supposed to be the new profit centers of the wireless carriers, may not be that at all — ever.

Now, the carriers face another profit challenge. How far will content providers go to lure consumers to use their services more? That question has not been answered yet. What is obvious is that companies like Facebook will not stand still and allow carriers to control access for their customers.