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The Airtel Zero idea: Splitting India’s Internet into many Internets


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What it was like before Mobile Internet opened up

Imagine what kind of an Internet you would have in India three years from now, once the Airtel Zero idea, of creating a free Internet by allowing Internet companies to buy data, becomes the norm across telecom operators. The top 4 telecom operators are adding around 9 million mobile Internet users a quarter. India is adding around 14-15 million a quarter, and that’s around 60 million a year, probably more, with free. Where will the next 200 million users that will come online in India prefer to go? Will they buy a data pack, or will they use the free Internet?

How Airtel Zero splits the Internet in India (tweet this)

Airtel Zero, which we wrote about yesterday, is a platform that allows Internet companies to pay money to Airtel, to allow users to get free Internet. On the face of it, for a user, this seems great. A few things to consider on how it splits the Internet:

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– Free and paid: What will they use? Facebook’s free Internet.org. Free Cricinfo. Maybe the free Indian Express (which calls “Net Neutrality” nonsense, here…do read the comments) instead of The Hindu or Times of India? Maybe YouTube will be free while Vimeo and Dailymotion will not be. Shopping from Flipkart at no data charges? Google, a part of the telecom lobby COAI and a serial violator of Net Neutrality in India (read this) will be free. With all the popular, favorite sites free, they’ll choose free. They’ll have to think before buying a data pack to access the freedom of the open web.

So, two Internets. Free and paid.

What will they see, when users who are on free try and go to a paid site? This:

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That’s what happened to me when I tried to access the open web on an ‘Airtel Live’ (not Mobile Internet) connection back in 2008.

– Indian and global: When a new app launches globally, will they line up outside an Indian telecom operators office, so that they can reach that 200-300 million users in India? Imagine if YouTube had launched now as a startup, and it wasn’t owned by net-neutrality-violating Google. Do you think they would have cared about being made available in India? Twitter – which has also violated net neutrality in India – recently launched a video streaming service Periscope. What if it isn’t available to those users on the free plan? All the small little tools that can launch globally now will not be available to that user base, because they won’t be able to roam the Internet freely.

So, two Internets: Indian and global.

What will they see, when users who are on the free Indian Internet, try to go to a global site that hasn’t signed up with a telecom operator? This:

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– Between big and small Internet companies: Indian Internet companies will need to raise higher funding, for their sites to be made available to free users who don’t have a data plan. So, Flipkart, with $1.9 billion raised last year, will be free, but, maybe, DailyObjects with lesser funding, will not. So the users on the free plans will never find out that DailyObjects exists, unless DailyObjects raises more funding and also signs up. What will student startups do? MediaNama was started with Rs 500 for a domain name, Rs 500 per month for hosting and our biggest expense was registration for a private limited entity. What will happen when most of the Internet in India is inside a walled garden? Will not market forces ensure that this so called “marketing expense” isn’t optional. If Flipkart has signed up, do Snapdeal or Amazon have a choice? How long will they hold out?

So, two Internets: one for the big funded companies, one for the rest.

What they see, when users who are on the free Indian Internet, try to go to a site that hasn’t signed up? This:

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– Between telecom operators: Now take this situation with Airtel, and replicate it across telecom operators. Different services free on different operators. Telecom operators could do exclusive deals with some sites (even though Airtel has said that it isn’t doing that now, it could, or others could), so some sites will be free only on one telecom operator, or available to those 200 million odd users from one telecom operator.

So, how many Internets? 26: Two Internets per telecom operator, and 13 telecom operators (including Jio). If ISP’s also go down this path (BSNL, Airtel and MTNL are the largest), and there are over hundred ISPs, then we would have hundreds of different Internets in India. Oh, just to clarify, that isn’t a good thing.

What they see, when users who are on the free Indian Internet, try to go to a site that hasn’t signed up with their telecom operator? This:

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Maybe it won’t be as bad as this

I’m giving you the worst case scenario. It might not be all that bad. All the telecom operators and ISP’s in India could collaborate and create a free “India Internet”, allows all apps and sites to make their product available to free across all telecom operators, maybe at a discounted rate. That still splits the Internet into two parts: free and paid. And there could be a single “Supply chain manager” (a role that exists in the mobile vas industry) which Internet companies, Indian or otherwise, have to negotiate with to make their app available, or negotiate with every year for the renewal as a vendor with telecom operators. Is that better? I don’t know. Telecom operators could also charge on a pay per use basis for sites outside the free Internet, and not block access, keep in mind two things: Firstly, once that distinction is created in a users mind between paid and free – they will lean towards free. Secondly, Indian telecom operators have a history of manipulation of their platform. In Mobile VAS, there is a “Supply Chain Manager” who renegotiates deals, telling “Vendors” that they’re making too much money, and more share needs to go the operator. Where have we heard that before? Well, in the TRAI paper, the telcos argue that Internet services are “free riding” on their networks, and that have very high valuations. That $19 billion WhatsApp deal, which valued the company higher than Airtel, probably really made them angry about this “free riding”.

Calling bullshit on Airtel’s “marketing spends” spin (tweet this)

Technically, Airtel Zero isn’t a marketing or promotional platform. It’s platform that allows Internet companies to buy data so their consumers have to pay for it later. It is essentially subsidizing Internet access. I can buy an iPhone and decide that it is available for free for anyone to take. If I don’t tell anyone about it, how will they know? The promotional aspect is separate: either the Internet company or Airtel will have to promote the services and the platform. Allowing companies to buy free access for consumers is not promotion.

Also, Airtel, in the interview with us, didn’t disclose rates, the list of companies that signed up, how this price was decided, or how different it is from what regular users pay. Srini Gopalan, Director – Consumer Business, Bharti Airtel, said that “The way our pricing structure works, the pricing is transparent, but I can’t talk to you about the details right now.” Okay, then.

Disclosures: Readers should bear in mind that MediaNama has always taken a strong pro-Net Neutrality position. Our coverage here. Personally, I’m helping create awareness of the issues that might arise from anti Net Neutrality regime.

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  • Old tactic, new spin though in public. Aircel did this several years ago with Facebook and WhatsApp http://www.aircel.com/AircelWar/appmanager/aircel/delhi;jsessionid=4Fp1THvMGh9ndLDHMdnYZLhm1sqk02lxfh23vXhpLGcPlDPWdhbB!749643738!1254367154?_nfpb=true&_pageLabel=P79201611381413016179527
    and I am sure other companies have done that as well.

    I wouldn’t call this a matter of net neutrality. Yes net neutrality would be under threat if those who didn’t pay were given slower access or blocked completely.

    • “I wouldn’t call this a matter of net neutrality. Yes net neutrality would be under threat if those who didn’t pay were given slower access or blocked completely.”

      Going at your own tail is not ass-licking, right.

      • Its a complete non sense. Big or well funded companies will invest a lot of money to have direct partnership with telecom companies. And in country like India where people keeps on looking for free opportunities/ discounts will never visit a paid site. Trai should stop this. I surprised to hear that brightest minds like Bansal’s are supporting this non sense. We should stop buying via Flipkart for the time being and teach them a lesson so that they can never thought to destroy net neutrality.

        Cheers
        @amitaimk

  • Pranav

    Please go to Airtel and ask pricing for making medianama.com available.

  • amrita dutta

    Hi, great piece. But you do The Indian Express a great disservice by accusing it of calling net neutrality nonsense. The piece you linked to is from The Financial Express, which does not speak for IE. The paper has consistently argued for net neutrality in its edits. http://indianexpress.com/article/opinion/editorials/net-mess/ and http://indianexpress.com/article/opinion/editorials/net-win/

  • Anuj Chadha

    Not an ethical move by Airtel… It seems Airtel wants to become service agent rather than service provider… TRAI officers should look into this matter seriously…

  • shreesha

    Do you think without Airtel Zero, the big bros cannot utilize the nature of human beings to get free gooddies? As long as there is competition and money business men will show their power in any which way possible. Regulatory bodies should be there to protect consumers interest.
    What if google shares profit with the users who uses their product? though it is little costlier effort for google than going with Airtel Zero, It is still do able for them. Biggies will do it to get the lion share. Tell me how can you prevent that?
    If any provider charges additional cost per an app or site, thats the NN violation and it is harmful for consumers and business orgs. But if something is freely or economically available, trying to oppose or rejecting it would be against the basic norm of business.

    And remember, if there is no quality of service and no value addition, people will not buy your product however cheap it may be.
    In this instance – AirtelZero – they are not charging per app/site basis. they are discounting per app/site basis. But if you go for paid version, you get everything independent of content providers.

    So, please do not mix NN with AirtelZero, If you have strong case against AZ put it independent of NN and do not confuse people.

  • Ajit Kumar

    It is really going to be negative for the rural. I actually wish to share my experience with reliance who publish their advt in a full sheet front page in malayala manorama saying free air, free sunlight,why not free internet? Reliace provide free internet to all reliance customers . To subscribe download internet.org free. I am living in panchayat and unable to access the net. When I happen to to go to taluk municipal area I went to the showroom of reliance and saught the help. They tried several time and could not succeed continuity in connection as range is poor.For downloading they had switched on the mobile data enable mode informing a one time data charge. After finding poor range even in municipal area thalassery-kerala I dropped the idea which is provided for METROs I came back home . Then i found that an amount of Rs15/ which was in the recharge keeping Re1/ balance was deducted for data usage. When I complained 198 they informed usage might be due to running application which has to be colsed in data usage mode.I felt cheated and complained by email but they replied that i had used the net and hence cannot refund the amount. I blame myself for believing a reputed telecome operator which solves genuine complaints at the beginning cheated me and lock the mobile data to avoid draining my charges on unused internet data charges. Now i use wi-fi to get internet.i am afraid if mob operators control over internet will force rural and semi urban to depend on computer and laptop as this charges not refunded as value added service

  • kkuma29

    Very interesting debate and all the indignation and theatrics make it even more interesting. There are communist vs. capitalist overtones with the startup taking the communist stand. Delicious.

    Here is my viewpoint: This Airtel Zero seems to the first step in a move to make bandwidth free in the hands of the consumers. This will be hugely beneficial to consumers. Content providers with have to pick up the bandwidth tab completely. I am loving it.

    Ironically this “free” model was first adopted by the content providers themselves. Most content is free for the consumer, being paid for by advertisements or they are free up to a point, until the user is “hooked”, after which user had to pay. Now, when the telcos wake up and say “why not use a similar model ourselves” there is righteous indignation.

    As for all this talk about level playing field and “don’t kill the small guy”, that is hypocrisy, for the following reason. The Internet has killed may brick and mortar businesses by giving things free or offering deep discounts. Think travel agents. Think book stores. That is called innovation”, “disruption” etc; all good. But now when the telcos start changing the script, borrowing the “free” philosophy from the content providers themselves, there is a clamor for simple, straight forward protectionism! Except it is disguised as righteous indignation – freedom of choice, freedom from discrimination etc. etc.

    Finally, this kind of stuff happens in the real world all the time – deep pocketed companies offer deep discounts to kill emerging competition. Walmart killed mom and pop stores all over the USA but brought in tremendous price efficiency which benefited consumers. Yet, when this happens to the Internet, the closet communists come marching out!