India's Airtel faces the wrath of consumers, politicians with Zero
How much Airtel's Zero violates net neutrality principles is being hotly debated, but what is clear is that this latest marketing ploy by India's largest telco is quickly turning into a public relations fiasco.
Last week, Bharti Airtel, India's largest telecommunications operator, created an almighty stir by introducing its latest and most controversial plan for internet access: Airtel Zero. Consumers nationwide fear that this number is exactly what consumers will end up getting -- in other words, zilch.
Airtel's new plan basically allows "partner websites" to get exclusive promotion through its broadband service and website. This means that anyone who is picked as a "partner" will have to fork out a sum of money that will essentially subsidize or make free to the consumer the data costs of surfing. The plan in essence can be looked at as a quasi-response to the Facebook-Reliance alliance via Internet.org, wherein Facebook struck deals with operators to "give away" their data services. Airtel is turning this concept on its head by allowing developers who want visibility to pay for real estate on its site.
Airtel claims that anyone can apply to become a partner, though you would imagine that in a market economy where a limited number of spots are available on the largest internet gateway in India -- used by 1 billion people, many of them shoppers -- the going rate for those spots will soon become exorbitant beyond imagination, and hardly affordable for a startup to shell out cold, hard cash for. More importantly, the fear is that much of this extra pricing will be ultimately pushed onto the consumer.
What has really got people hot and bothered is the impression that Airtel is violating the basic tenets of net neutrality -- a global principal that postulates an ISP should not play favourites, and should allow access to all sites at the same speed.
TechCrunch quotes Tim Berners Lee, inventor of the World Wide Web, as suggesting that "positive discrimination" of the kind Airtel is purportedly practising is dangerous: "In effect, they can become gatekeepers -- able to hand-pick winners and losers in the market and to favour their own sites, services, and platforms over those of others. This would crowd out competition and snuff out innovative new services before they even see the light of day," he said.
Naturally, Airtel sees zero problems with Zero. "The initiative is an open, non-discriminatory platform: A win-win for developers," Srini Gopalan, director of consumer business at Bharti Airtel, explained on TechCrunch. "Our goal is to help developers reduce their cash burn; it is not a walled garden."
Gopalan claimed that the plan could be crucial for developers, who he says can bring down marketing costs by as much as two thirds and boost internet usage by a substantial amount. "A small fraction of our [220 million] customers actually use the internet," he said. "This [program] is about driving digital inclusion ... [we want to make] a vast range of apps available for our customers."
India is the last great internet El Dorado, a country that has bypassed the computer revolution and leapfrogged to a smartphone one. Most Indians are and will continue to be experiencing the internet through their smartphones. And companies like Airtel are no longer seeing growth in revenues through voice; their future prosperity lies in data services, and the sooner Airtel can both promote these as well as pick some winners to help propel growth in data, the better its prospects in a fiercely competitive telecom landscape will be. Tack on the gargantuan costs of purchasing bandwidth, and you can see why Airtel doesn't see a problem in monetizing with its market muscle through schemes like Zero.
It certainly hasn't endeared itself to the public, though. This isn't Airtel's first battle in the net neutrality arena. Last year, having witnessed the incredible popularity of WhatsApp and Skype, largely used by consumers who elected to either pay data charges while connected to these apps or used them while on a wireless connection, Airtel toyed with the idea of slapping on an extra cost for accessing them, but the uproar created by angry consumers prevented it from going ahead with the plan.
Last week, Flipkart (India's largest e-commerce site, and allegedly one of the first to sign up and get accepted into the partner program) co-founder Sachin Bansal sent a tweet out in support of Airtel Zero and proclaimed that it didn't contravene net neutrality. The backlash was fierce and swift. Apparently, many began to instantly downvote Flipkart's Android app to a one-star rating.
The fear that big business can very easily throttle the internet by demarcating different speeds for different customers is mushrooming in India, a country that will rely hugely on the kind of innovation and accompanying jobs that internet-related business can bring in. Allowing a violation of net neutrality by not permitting today's fledgling startup to grow up to become tomorrow's disruptive behemoth will ultimately prove disastrous, and determinedly against the kind of terrain that made the Googles and Amazons of the world possible.
For now, though, it seems a little hazy as to how detrimental Zero will actually be to a thriving internet landscape and economy. The Telecom Regulatory Authority of India (TRAI) is seeking public opinion on 20 questions related to net neutrality, which will influence its stance on the issue.
Politicians, however, have been quick off the blocks to not only stridently back net neutrality, but also implement measures that could decide the fate of plans like Zero. Telecom Minister Ravi Shankar Prasad has spoken about the common man having unfettered and indiscriminate access to the net. His ministry has one-upped the regulator TRAI by saying that the final word will be had next month by his department, and not the regulator, after its appointed six-member panel comes back to the Telecom Ministry with its findings.
India can be an unpredictable place to do business. But if these kinds of consumer reactions and events are reliable indications to go by, Airtel may find itself holding onto a plan that will ultimately amount to pretty much what its name stands for. And that's the last thing that India's largest telco operator would want as it stands to dominate the next largest migration to the internet in the world.