“Facebook is subsidizing mobile phone data service, making it “free” for users – but with a catch: for all practical purposes, Facebook then becomes their entry into the internet.”
Facebook makes use of its huge market share advantage: they are the largest online communication service company. They have strong buyer power due to the number of users, but weak threats, because they almost monopolize the market worldwide. It is pretty hard to find substitutes, although there might be some potential competitors.
In terms of Porter’s Generic Strategies, Facebook uses a strategy in a narrow segment: becoming the only company that holds users’ personal information. In addition, the subsidizing mobile phone data service is a focus strategy since it differentiates from other companies.