From an investor's perspective, Facebook (FB +0.23%) CEO Mark Zuckerberg's plans to bring Internet connectivity to the world's underserved masses isn't exactly a game changer. However, there are certainly some strong philanthropic arguments for Zuckerberg's Internet.org initiative -- or "Free Basics" as it's now called – not to mention the long-term benefits of growing Facebook's monthly average user (MAU) base by giving non-"friends" a means to join the MAU party.
That said, with 1.55 billion MAUs and counting, Facebook hardly needs folks in India to board the train, but it sure wouldn't hurt, either. That's why Zuckerberg and team partnered with India-based Reliance Communications to introduce mobile Internet connectivity -- for free, mind you -- as one of Facebook's first forays into its Free Basics plans. Turns out, free may not be good enough.
You're kidding, right?
In February of this year, Facebook inked its deal with Reliance Communications to bring free Internet access to India's billion or so citizens who owned a mobile device (primarily smartphones) but did not have access to the Internet. The problem, according to Reliance exec Gurdeep Singh, was the price barrier associated with data plans.
The solution? Easy. Facebook teamed with Reliance to provide those billion non-Internet connected users with its Free Basics online access. Free Basics is a watered-down version of the Internet that includes news, maternal health, travel, local jobs, sports, communication, and local government information.
Alas, India's telecom regulator has determined that Facebook's offering of free Internet access -- albeit a scaled-down version -- quite possibly breaches net neutrality rules since users aren't able to troll the entire Internet but are "limited" to the aforementioned areas. As a result, Free Basics has been suspended in India until further notice.
Not so fast
In response to India's telecom chief's call to put an end to Free Basics, Facebook has since launched an email campaign to save the free service, asking users in India to "petition the TRAI [Telecom Regulatory Authority of India] to save the service ahead of the regulator's public consultation on 'differential pricing for data services.'"
Believe it or not, India's efforts to shut down Free Basics doesn't come as a surprise. Before the service was even available, a small but vocal group of campaigners started a "save the Internet" initiative against Facebook's plans to bring the Internet to India's masses, citing its "two-tier Internet" accessibility. Apparently, no Internet access is better than some Internet access?
Moving forward
Facebook's experience should prove to be even more interesting as digital ad king Alphabet (GOOG 0.20%) (GOOGL 0.39%) readies its own access initiative in India via its Project Loon Internet-beaming balloons. Just last week, Alphabet said it's almost ready to begin testing its service to "reach out to rural areas," making the Internet available to those without existing coverage. Alphabet has also agreed to align itself with a local telecom provider -- in this case, BSNL.
As with Facebook, it's not surprising that some government officials in India are already grumbling, suggesting that Alphabet's balloons may cause mobile communications disruptions. However, Alphabet has greased the wheels, so to speak, by also agreeing to provide Wi-Fi access in as many as 100 of India's railway stations. Will that be enough to appease fickle government officials? Stunningly, the answer is maybe.
Again, the success or failure of connecting a billion of India's mobile population to the Internet isn't a requirement for Facebook -- or Alphabet, for that matter -- to continue growing revenue. Facebook is close to bringing its Oculus Rift virtual reality headset to the world's gamers; WhatsApp and Messenger are both nearing 1 billion MAUs and neither have been monetized as yet, not to mention Instagram is expected to become a multibillion-dollar business in and of itself.
That said, come on. Stop looking a gift horse in the mouth and appreciate what folks like Facebook and Alphabet are trying to accomplish: helping to bring India into the 21st century.
