Mobile operators plan to block online advertising


Several mobile operators plan to block advertising on their networks, setting the stage for a battle with digital media companies such asGoogle, AOL and Yahoo.

One European wireless carrier told the Financial Times that it has installed blocking software in its data centres and planned to turn it on before the end of 2015.

The software prevents most types of advertising from loading in web pages and apps, though it does not interfere with “in-feed” ads of the kind used by Facebook and Twitter.

The blocking technology was developed by Shine, an Israeli start-up whose shareholders include Horizon Ventures, the investment fund of Li Ka-shing, Asia’s richest person.

Mr Li also controls Hutchison Whampoa, one of the world’s largest telecoms groups.

“Tens of millions of mobile subscribers around the world will be opting in to ad blocking by the end of the year,” said Roi Carthy, chief marketing officer of Shine. “If this scales, it could have a devastating impact on the online advertising industry.”

Verizon, the largest US telecoms group, this week paid $4.4bn to buy AOL, seeking to gain a foothold in the rapidly growing market for advertising on mobile devices.

Marketers will spend almost $69 billion this year on mobile ads — more than triple the sum they spent two years ago — according to research group eMarketer.

Shine said it was working with a number of operators, including one with almost 40 million subscribers, though it declined to name them.

An executive at a European carrier confirmed that it and several of its peers are planning to start blocking adverts this year.

The executive said that the carrier will initially launch an advertising-free service for customers on an opt-in basis.

But it is also considering a more radical idea that it calls “the bomb”, which would apply across its entire network of millions of subscribers at once. The idea is to specifically target Google, blocking advertising on its websites in an attempt to force the company into giving up a cut of its revenues.

The Silicon Valley company is the world’s largest advertising business, generating $60 billion a year from search, YouTube, and services such as Google Display Network and DoubleClick, which both deliver ads for third-party sites.

The executive at the mobile operator considering “the bomb” acknowledged that targeting Google could be risky from both a legal and public relations perspective. Under “net neutrality” rules in the European Union and the US, telecoms companies are forced to treat all data that flow through their networks equally.

But even within those markets, it would be feasible to block adverts on Google “just for an hour or a day” to bring the company to the negotiating table, the executive said.