Is The Problem Airtel Zero OR Splitting Of Internet?

If an OTT comes up with an Airtel Zero type platform, will that be OK?

To start with I want to make a few disclaimers- I am in full support of net neutrality. I am no expert on net neutrality, but I have been actively following the topic since the TRAI paper came out.
I read an article by Nikhil from Medianama today- The Airtel Zero idea: Splitting India’s Internet into many Internets.zero
I know he has publicly stated his support for net neutrality and has done amazing work on it. I agree with most of his work and agree with his (and many others) concerns on Airtel Zero as well. Yes, it may split India’s internet into free and paid.

But, is the problem Airtel Zero or Splitting of Internet?

I wonder if all of us would share the same concern (splitting of Internet) if an OTT (any app) provides a platform similar to Airtel Zero? Imagine an app which helps the user surf other apps for free by subsidizing them.
Infact as Ashish wrote Airtel Zero is a great business idea and some startup tech company should work on it! Some are already very close to it. Apps like Cashboss, mCent, Cashon, Cashbox, Blee provide recharge credits for downloading and using apps.
A look at mCent’s description in Play store will give you a very clear idea.

“mCent is a great way to discover free Android apps and get rewarded with free airtime right on your mobile phone. In the last year, over 6 million people have earned enough mobile airtime to pay for900,000,000 MB of mobile data charges.”

The business model is very simple and similar to Airtel Zero. Apps like Flipkart, Snapdeal, Olx, Quikr etc can pay money to mCent and mCent in return passes it to the user as recharge to customers and ultimately subsidizes their usage. So in layman terms, companies pay marketing $ for the usage of their apps by customers.
The only difference in my opinion is Airtel Zero will have the ability to directly subsidize the user and mCent will indirectly subsidize the user.

A screenshot from mCent’s google play store page
A screenshot from mCent’s google play store page

Now imagine the below scenario, which I think mCent can start and offer a Airtel Zero type platform. [would love to know if someone is already doing it]
Imaginary scenario where mCent is offering Airtel Zero type platform
Imaginary scenario where mCent is offering Airtel Zero type platform

 
Lets talk of some of the reactions if mCent or any other tech company offers this service.
Millions of users will be using it which would mean companies would be spending marketing $ to get access to the user base
Great business model would mean lots of funding and amazing valuations [mCent has already raised US$15 mn from Publicis Groupe]
We would infact be talking about how these apps are bringing millions of first time users to internet for free in India and bringing in a digital revolution
We would all be saying that telecom players missed another opportunity and are sulking!
In favor of net neutrality, we can definitely argue that Airtel Zero should not have any unfair advantage over any of the OTTs mCent/Cashboss/Cashon.
So my question is whether we have a problem with AIRTEL ZERO or the OUTCOME of it?
[Follow Sandeep Reddy on Twitter: @hsrdce]

1 comment
  1. The problem is with the OUTCOME of AirTel Zero. A part of the Net Neutrality debate is conjecture and has been extrapolated from past experiences in DTH TV and Value Added Services (VAS) in Mobile. Net Neutrality is attempting to avoid the disasters of DTH and VAS. Just like, Telcos haven’t faced any overall losses yet but are saying that they ‘may’ face losses in future.
    After having licensed a public resource, the Spectrum, an ISPs first responsibility is to provide consumers unfettered access to the internet and not to serve the marketing efforts of private companies. The likes of mCent never licensed a public resource and are pure marketing platforms. ISPs need to perform a very careful balancing act while expanding their private business interests. According to me, AirTel has to answer the following questions in context of AirTel Zero and the wider Net Neutrality debate:
    1. Is it Anti-competitive? – Being an end-users first point of contact to the internet (a public resource), how does it affect consumer choice? As I see it there are two ways it can happen, first, psychological effect (free vs paid) or second, does it completely restrict access to non-paying apps/sites?
    2. Does it create a scenario that end-users on the paid tier have to pay exorbitant prices? (don’t call me stingy but to be honest, anything seems high compared to free)
    3. Is the Quality of Service (QoS) for end-users of an app/site adversely affected after the app/site stops paying or never pays the ISP for its users? (assuming end-users continue paying for their internet connections)
    4. Does it charge, both end-users and apps/sites, differently based on content of the data (message, voice, music, video, etc)?
    5. To accommodate startups, even if they implement a pay-as-you-go tiered-pricing model based on end-user usage (like SaaS), does it create uncertainty and a major financial barrier for companies at later stages? (Ease of doing business)
    6. How does it address situations of conflict of interest, currently or in the future, for eg, Hike and Skype, Wynk and Saavn?
    It might be that the launch of AirTel Zero was very badly timed and became fodder for the ongoing Net Neutrality debate.

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