Guess Whose Winning India’s Data Wars?

Free Data is one thing, but what we’re doing with it, is remarkably predictable.

Heard of that story that when two cats fight over a treat, the monkey swoops in and runs off with it? Well, that may be happening to Telecom in India.

Before I get to the meat of this article, I think you’d do well to get some background on the Indian telecom market.

Telecom is probably one of India’s biggest trade-related success stories in the last two decades. There was lots of money made, and where there is money, there is competition and there is attraction (to newer players).

Soon after the first batch of telecom operators started raking in the billions, many others swung into the burgeoning market, on the back of path-breaking Telecom liberalisation efforts by the government. Suddenly there were 14 operators vying for the customers’ money. And Talk Time (calling minutes, not Data) and Text Messaging were the biggest bread-earners.

Over the years, consolidation occurred in the industry and mergers happened as a continuation of Corporate Darwinian Filtering. Yet, as Telcos battled each other to gain more and more customers, they themselves settled into comfort zones — within and towards each other. Aware of each others’ strengths (and weaknesses), Telcos made their own success stories and bandwagons of customers.

Then in 2015 a new world threatened to emerge — that of free internet being made available to the masses in India via global players like Facebook and Google. Internet.org rode the airwaves and blogsphere with a feverish pallor.

So you’re clear, internet.org offers pared-down World Wide Internet services on mobile phones, along with access to the company’s own social network and messaging services, without charge.

For most of the last two years, the Indian Telecom industry united against that threat common to each of their existence (and balance sheets). In fact, the Telcos sensing the potential impact (i.e. the deflation of revenues), rallied together in a rarely seen act of bonhomie.

The threat also caught the fear-nerve of Indian tech startups who sensed that their (relatively) nascent industry could lose it’s potential growth trajectory in the absence of a democratic internet. Nine start-ups including Paytm (backed by China’s Alibaba Group), dining app Zomato, and others teamed up with the Telcos and their united attack leveraged something larger — the threat of Net Neutrality stifling freedom.

This threat caught the imagination of educated Indians, including the Regulatory bodies, and the Press. Finally the combine was successful in warding off the common foe — Facebook.

Internet.org, was shelved, despite its rebranding to a more unassuming name like Free Basics. Did it die? Not at all! Facebook continued with it’s program outside of India — launching the service in more than 35 developing countries around the world. Some reports say that most of these countries’ first-time users actually see Facebook being synonymous with Internet Connectivity.

Fast foward to 2017.

Today, Indian Telecom has a different battle ground — “Free Calls and Free Internet”, courtesy a new and very hungry telecom player — Reliance Jio.

Once again, existing operators have united against a threat common to them all. But in this case, the unity and commonality of purpose may be their undoing, because as they fight tooth-and-nail with Jio, neither the Regulator (TRAI) nor the licensor (the Department of Telecom) in India are backing the combine.
Given that some of the Telcos vs. Jio matters have reached India’s telecom court (called TDSAT) and talks in corners allude to some favouritism by the Governance Duo (of the licensor and the regulator) towards Jio, the relationship between the Telcos and the Governance Duo , is strained.

Why is all this pertinent?

Well, as the Telcos fought off Jio’s ambitious “Free Calls, Free Internet” salvo using Jio’s own strategies, using fire to fight fire, the Indian customer suddenly started receiving free or very inexpensively priced Mobile Data gratuitously from their Telco.

Consequence? Mobile Data consumption pole vaulted into never-heard-of limits. Indians suddenly started doing a lot more on their phones, without much risk of “bill shocks” or mushrooming expenses. Videos, surfing, app downloads — all started happening more casually while on the move (most people no longer waited to be back in Wi-Fi or Broadband coverage, before they started consuming MBs worth of content).

Guess whose benefiting the most — Telcos? Jio? Apple? Google Play Store?

Wrong.

The world’s friendly neighbourhood Social Media giant.

Facebook’s strong fourth quarter numbers clearly prove that India has proved to be the social media giant’s “strongest” growth market.

Facebook fourth quarter revenue was USD 8.81 billion, significantly higher than the USD 5.84 billion it posted a year ago. Net profit for the quarter came in at USD 3.57 billion — more than double the USD 1.56 billion it posted a year back.

And… these numbers include a significant USD 1.35 billion from the Asia region.

Speaking at its earnings call, Facebook’s CFO David Wehner said, the company’s growth in Asia was boosted by the free Data being offered in India.
“In the fourth quarter, wanted to call out that we have seen an increase in third-party promotional free data plans in places like India”, Wehner said.
“So that (free offer) clearly is having an impact in APAC (Asia-Pacific) and India was our strongest growth market (by user base). So, that would be something that I would say was a little bit more unique this past quarter”, Wehner confirmed.

That’s not all. Towards the end of the fourth quarter, the California-headquartered company saw an 18% year-on-year consumer base growth to 1.23 billion daily active users — that include 396 million from Asia itself.

Of Asia’s numbers, 165 million users were from India — Facebook’s largest pool in the world after the U.S.

A recent study by Smart-app pegged Facebook as the biggest beneficiary of the free Data offer in India. The finding reports revealed that Facebook logins surged to 467% after the new entrant Jio started it’s free promotional services.

The second biggest beneficiary according to Smart-app, are video apps such as YouTube, Hotstar, Amazon Prime and Netflix — which have together have seen a jump of 336%!

These numbers are staggering, and clearly prove there’s lots of hunger in India for content and connectivity. This then, explains why India is so important to Facebook’s ambition — only 252 million out of India’s 1.3 billion people have Internet access, yet, it is already Facebook’s second largest market outside of the United States. Clearly, the math indicates that if only a fraction of the market can become so big on Facebook, imagine what the whole could do for it!

Now, if only there was an Education-focused platform that caught India’s fancy in the same manner — that would be something to crow about, won’t it?

So, people, expect more from Facebook, but be vigilant. There’s no such thing as a free lunch, remember!

Originally published at Chip-Monks.