Social media service, Facebook Inc. FB has run into trouble with Indian regulators. Per media reports, the Telecom Authority of India (TRAI) has asked Facebook’s operator partner, Reliance Communications, to “put on hold” Facebook’s Free Basics services in the country for the time being.
Reportedly, TRAI had sent the notice to Reliance Communications two weeks back. However, the service is still accessible.
TRAI is assessing whether the Free Basics service is in sync with the net neutrality principle and has asked Reliance to submit a detailed report about the terms and conditions of Facebook’s service. Meanwhile, the regulatory body is also seeking public opinion on the matter.
The Indian government is in the process of setting new rules for net neutrality. The draft of the new guidelines is expected to be out on Dec 28. The final version is expected to be out on Jan 4 following amendments.
Net neutrality implies an open-Internet atmosphere, which will prohibit ISPs, especially telecom and cable TV operators, from discriminating against applications.
Free Basics Services, a part of the Internet.org project, is Facebook’s effort to rope in more users by providing free access to Internet across the 19 emerging markets of South East Asia, Latin America and Africa. These emerging economies with their burgeoning population offer a great scope for expanding its user base. The project was launched two years back and carries $1 billion in investment.
As part of the initiative, Facebook is seeking partnerships with wireless carriers who will roll out telecom networks and offer data services, particularly in these countries. Also, the lack of physical infrastructure has propelled the increasing use of mobile Internet in the region, which is in tune with Facebook’s growth strategy.
In February, Facebook, which carries a Zacks Rank #2 (Buy), had partnered with Reliance Communications, the fourth largest Indian telecom provider by users, to provide free Internet in the country. However, the service came under fire as people said that it isn’t in sync with the net neutrality concept as it benefits a handful of players in the competition.
However, Mark Zuckerberg has been heavily defending the service in India and elsewhere. Zuckerberg had earlier said that Facebook totally agrees with the net neutrality principle but at the same he advocated “that if people can’t afford to pay for connectivity, it is always better to have some access and voice than none at all.”
This isn’t enough to pacify the critics of the service, who accuse Facebook of trying to exercise control over users’ preference by giving them limited Internet access.
Recently, Facebook began a marketing campaign in the country to find public support for its Free Basic Services initiative. As per a Wall Street report, the social media giant has been “running advertisements in newspapers and billboards and sending text messages” to garner public support. Moreover, Facebook is sending users in India, alerts which when clicked would send a direct email to TRAI showing support for the Basics services.
Why India is Such a Big Deal?
Facebook is trying desperately to not lose any ground in India. The country’s demographic strength offers immense potential for growth, especially because of the rapid adoption of smartphones. By the end of this year, according to Forbes, Internet users in the country will cross the 400-million milestone. It will thus surpass the United States to become the world’s second largest Internet market. This projection does not include 1.2 billion Indians without Internet connectivity. The Indian government has launched a massive Digital India program to take technology to the rural masses and further increase technology adoption.
Moreover, Facebook has over 130 million users in India, making the country its second biggest market after U.S. In fact, as per an eMarketer report, MAUs in India are expected to grow to 211.2 million by 2018 while the country’s mobile Facebook users will increase to 145.9 million surpassing the U.S. by 2017.
Not just Facebook, all the tech behemoths are trying to grab a slice of the Indian market. Recently, Alphabet Inc. GOOGL CEO Sundar Pichai in his speech at Delhi stressed on the same.
A few days back, Microsoft Corporation MSFT announced the launch of three Azure data centers in the country, in Pune, Chennai and Mumbai. Even Amazon.com Inc. AMZN is well aware of this fact and therefore has been investing heavily in the market. In an era where Indian enterprises are shifting from traditional data infrastructure to cloud-based services, Amazon has announced its plans to develop an AWS infrastructure region in India in 2016.
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