India’s largest carrier Airtel (NSE:BHARTIARTL) is facing a lot of backlash from customers in the country after announcing a controversial new initiative called Airtel Zero that lets customers access select content partners’ apps without incurring data charges. The program will involve app makers paying for any data charges incurred by their customers, which has led to a series of protests centered around net neutrality.
The crux of the issue is that Airtel gets to decide the content partners it approves, and while the carrier has stated that anyone can come aboard its Zero initiative, most nascent e-commerce providers will be unable to bear the costs involved therein, skewing the market toward the established players such as Flipkart.
What is Airtel Zero?
With Airtel Zero, application providers that sign up with Airtel will be able to provide their content for free on the platform. In a country where data charges are significantly higher when compared to voice calls, the ability to use browse for free will be hugely beneficial to the content providers that partner with Airtel. However, those that don’t or cannot afford to sign up with Airtel will face an uphill battle to attract a similar amount of attention from consumers. For instance, if one major e-commerce store — say Flipkart — partners with Airtel Zero, and the others — Amazon (NASDAQ:AMZN) and Snapdeal — do not, customers on Airtel will automatically gravitate toward Flipkart for their online purchasing needs.
At a conference in Mumbai earlier this month, Bharti Airtel chief for strategy Shyam Mardikar tried to defend the carrier’s platform, stating that it is a “service” that will be beneficial to millions of consumers:
The Internet, I believe, was neutral, is neutral and will be neutral. There is absolutely no agenda, no direction, no industry force coming in way. But what we are confusing here is the concept of service neutrality to net neutrality.
We believe that in the guise of net neutrality if we’re starting things that suggest neutrality, then next step would be to abolish licensing regime, and get on a free for all.
Airtel’s argument is that it isn’t the only carrier in the country offering internet access for free. Reliance (NSE:RCOM) launched Internet.org in collaboration with Facebook in the country earlier this year, offering access to a slew of internet-based services to its customers for free. Airtel has stated that since its Zero initiative is similar to that of Internet.org, it should be treated equal. However, the caveat with Internet.org is that access is only on 2G, and while Airtel has said that it would not create a fast lane for its partners, there is concern that the carrier may do just that at a later stage.
Flipkart pulls out
For what its worth, Flipkart has pulled out of the initiative after a slew of 1-star reviews on the Play Store called out the vendor for not playing fair. In a statement today, the e-commerce store confirmed:
We at Flipkart have always strongly believed in the concept of net neutrality, for we exist because of the Internet. Over the past few days, there has been a great amount of debate, both internally and externally, on the topic of zero rating, and we have a deeper understanding of the implications.
Based on this, we have decided on the following:
We will be walking away from the ongoing discussions with Airtel for their platform Airtel Zero.
We will be committing ourselves to the larger cause of Net Neutrality in India. We will be internally discussing over the next few days, the details of actions we will take to support the cause.
We will be working towards ensuring that the spirit of net neutrality is upheld and applied equally to all companies in India irrespective of the size or the service being offered and there is absolutely no discrimination whatsoever.
While there isn’t any legislation relating to net neutrality in India, the country’s equivalent of the FCC — Telecom Regulatory Authority of India — has issued a circular and is now taking in comments before initiating official discussions next month. To date, over 300,000 e-mails have been registered with TRAI in favor of net neutrality debate, and there’s a SaveTheInternet campaign that is gaining momentum in India.
