Bharti Airtel, India's largest service provider, has recently launched a new "open marketing platform" branded Airtel Zero -- designed to let customers access mobile applications "free of charge."
Airtel Zero offers a high-profile example of "zero-rating," whereby service providers try luring customers to pricier data plans by offering a free or heavily discounted taste of web services. More than 150 companies are believed to have joined the Airtel Zero platform, including Flipkart, a popular Indian e-commerce site.
Similar services are being offered through Internet.org, a partnership between social networking giant Facebook and various mobile operators in emerging markets. Reliance Communications Ltd. , India's fourth-biggest mobile operator, is offering free access to some 38 websites through its involvement with Internet.org. Bharti Airtel Ltd. (Mumbai: BHARTIARTL) has also been working with Internet.org in Africa.
Essentially, Airtel Zero works on the premise that Bharti Airtel charges the web players, rather than its mobile subscribers, for Internet access. However, this also means that a user will be able to access only those websites that have joined Airtel Zero, and not any others, prompting concern among supporters of net neutrality.
Bharti Airtel has been quick to play down such concerns. "As a concept Airtel Zero has nothing to do with net neutrality. It is free for each and every customer and offers the same speed to all. It charges the same amount to each company for data without any discrimination," said Srini Gopalan, Bharti Airtel's director of consumer business, in a press release.
Like other Internet.org operators, Bharti Airtel argues that free Internet usage through Airtel Zero will spur Internet adoption in the country. Yet critics fear zero-rating could allow bigger web players to muscle smaller rivals and startups out of the market -- a point that Bharti Airtel has been quick to refute.
"Today, when a consumer downloads a new app and uses it for a day, the total amount of data consumed is roughly about 20-30 MB. Assuming a price of INR 1/MB [$0.016/MB] of free data, this will translate to INR 20 [$0.32] for the start-up. Compared to this, the average cost of marketing digitally through large media/ internet companies is about INR 50 to 300 [$0.80 to $4.82] per download. So, this platform will actually make it cheaper for small companies to gain distribution as well as visibility," said Gopalan in the operator's statement.
At the moment, there is no law mandating net neutrality in India. But the Telecom Regulatory Authority of India (TRAI) has issued a consultation paper on whether regulations are needed. Bharti Airtel and Reliance are unlikely to be the only players arguing that operators should be allowed to treat some data services differently from others.
— Gagandeep Kaur, contributing editor, special to Light Reading