Due to the fact that their mobile ads have been so profitable, Facebook has been enjoying the last few years. In fact, when they released their earnings report in November, their ad revenue over the quarter stood at $4.3 billion, a 45% growth compared to the past year. Every month, more than 1.5 billion people use the social networking site, which equates to more than half of all people who are online in the entire world. Facebook has been attracting around 100 million people per year and the reality is that this is now unsustainable – they have effectively reached almost everyone they can reach on the planet.
The result is that Facebook is now looking for new people to join their network, and their focus is on those areas where people still struggle to get online at all. Facebook has launched a number of projects to address this, including giant solar-powered planes and satellites that beam WiFi down to geographical areas without access and Free Basics.
The core objective is undiscriminated open access to knowledge and information. According to Mark Zuckerberg, there’s untapped potential in liberating information. It could mean prosperity for developing countries.
Mark Zuckerberg had decided that the world should be online and he started Internet.org, of which Free Basics is part, some two years ago. There are now over 30 countries in the world where he offers the Free Basics program. This essentially means that people are able to access simplified versions of certain websites, including Facebook, through their mobile provider, without having to pay for data. Access includes the weather, news and health care information. In the chosen countries, one or two mobile carriers will offer Free Basics and their incentive is that it is more likely that their users will start to pay for bigger data plans.
According to Facebook, the goal is to create a connected, open world and that the goal is not further growth. India is the country of greatest interest for this. Some 375 million people use the internet there, 130 million of whom are on Facebook. More importantly, more than 800 million people in that country are not online. The only place where these statistics are less favorable is China, where Facebook is blocked.
As soon as Zuckerberg went on paternity leave, he started to lobby for Indians to support the program.
Zuckerberg says that although libraries don’t offer every book to read and hospitals can’t cure every illness, they still provide a “world of good,” suggesting that just because free internet services only offer access to a limited number of sites they’re still an essential public service.
This came in response to the suspension of Free Basics by the government in India. Reliance Communications was the only Indian Free Basics carrier and they had to switch it off. The government is now weighing up arguments for and against Free Basics. The biggest argument against it is that it stifles competition by breaking net neutrality rules, while the primary argument for it is that it is a necessity for the people.
An emerging country like India needs to provide the consumer with incentives to get onto the Internet.
Since the suspension of Free Basics, Facebook has taken out full page advertisements in large newspapers and billboards in India every day. Zuckerberg has also spoken to the Indian media himself to plea with them to approve and support his services.
If we accept that everyone deserves access to the Internet, then we must surely support free basic Internet services. Who could possibly be against this?
But it appears that there people who are against it. They claim that it is actually dangerous to implement Free Basics as it will make fundamental changes to the economy of the internet. Companies would be able to pay for preferential treatment, and this means that the level playing field that the internet is built on will be destroyed. And it is unfortunate that it seems that the most prominent opponents refuse to enter into any discussion with Zuckerberg for a debate about this.
Then, there are opponents who say that growth will happen regardless of Facebook.
We don’t see Free Basics as philanthropy. We see it as a land grab.
India is known to have a very protectionist government and on that basis, the above statement is true. In April 2015, a top mobile carrier in India attempted to underwrite data costs for a number of specific apps. The resulting criticism was very heavy and Bharti Airtel, the carrier, had to put it on hold for now. Thus, the opponents are not really against Facebook, in other words, but rather have a genuine concern.
According to analysts, Facebook is acting as if it will now be incapable of getting more Indians online, but this is simply untrue.
An emerging country like India needs to provide the consumer with incentives to get onto the Internet. What Facebook Free Basics is doing is a bit extreme, but what you do need is a bit of a middle path.
According to opponents, Facebook needs to focus on the 200 or so million people in India that are already online but are not on Facebook yet. While they do so, the symbiotic process of getting more of the country online will continue. On the other hand, Facebook believes that the likelihood of people signing up for full internet after using Free Basics is very high. This is because it does not include video streaming and it is believed that 64% of data traffic in India accounts for video streaming.
Of course, it can also be said that Facebook hopes that those who pay for more data will also use more Facebook. The effect could be that Facebook becomes the internet in India. After all, Google is not included in Free Basics, although the internet giant has not commented on this.
Public comments could be filed until January 14 and some 2.5 million responses have been received. The majority supported Free Basics. Nevertheless, it has not yet been relaunched. Rather, Egypt has also suspended Free Basics, without any explanation. The future is unclear, in other words.