India is personally very important to the history of our company.” Indeed, Facebook CEO Mark Zuckerberg’s love affair with India continues. He lost the hoodie, rendered himself unrecognisable in a suit and hugged Narendra Modi during the prime minister’s recent tour of Silicon Valley. Later, he popped up in India, clad in the more familiar baniyan, strutting on the stage at IIT-Delhi. The business case for Zuckerberg’s hugging of India is solid: With 134.5 million users in July, anticipated to balloon to 269.5 million by 2019, this will be Facebook’s largest market. Indians already offer Facebook the largest user base for its subsidiary, WhatsApp. India is important not just to the history but also the future of this company.
Zuckerberg’s mission is, however, bigger than that of a CEO paying a courtesy call to his largest customer base. India is also home to a chunk of the 4.5 billion people who cannot be his customers because they have no internet access. He was here to also sell Facebook’s year-old project, Internet.org, or Free Basics, that promises the digitally excluded internet access that is both free and basic. The service has already reached a billion people in 19 countries.
But he is being pilloried for his efforts. He has run afoul of those clamouring for net neutrality, or equal treatment for all traffic on the internet. Free Basics is designed to offer free access to a select set of websites, like a “lite version” of Facebook, Wikipedia and others, along with a limited number of content services on mobile phones. No doubt, as more people get this access, Facebook itself will be a big beneficiary. A Mobile Africa 2015 study finds that Facebook is the most popular phone activity for those who get access to the internet. In India, 58 per cent of those surveyed by Geopoll and Jana even believe that Facebook is the Internet. All this is getting more yikes than “likes”.
There appear to be four principal quarrels with Zuckerberg. First, the initiative will create a digital caste system — those with access to the entire internet and the rest with access only to a walled-in ghetto. Second, when Facebook offers free internet, it has a private motive in mind and will corner the internet, depriving the next billion of its many wonders. Third, Facebook has no skin in the game; it is free-riding off the telcos. Fourth, there are already public policy plans to provide full internet access to those who do not have them.
Here is where I believe Zuckerberg is right and his critics are wrong. Consider each of the four principal concerns. First, the real digital caste system is where the 80 per cent are excluded from what the 20 per cent enjoy. Is it better for a society to provide access of some kind to more people, or should a guarantee of the absolute principles of net neutrality come first, regardless of whether it deters private initiative to provide free access? Only 19.2 per cent of India has internet access. This means accepting that even a limited form of access is better than none.
As long as internet penetration is stuck at 20 per cent, concerns of net neutrality seem horrendously elitist.
Second, it is better to have the private sector invest in inclusion for core business reasons than for charity or CSR. Despite its size, India is not even among the top 10 e-commerce markets in the world. The country has tremendous room for growth. Given this context, it is little surprise that digital businesses — Facebook, among others — want to improve internet awareness and access. In Harvard Business Review, Ravi Chaturvedi and I argue that India has one of the highest potentials for growth if the critical bottleneck of internet access improves. Of the 50 countries in our “Digital Planet” study, India has one of the lowest internet-penetration rates and one of the highest mobile-internet gaps (difference between number of mobile phone owners and those with internet). But it is also one of the faster-moving countries in terms of the pace of its overall digital evolution. This combination of factors would make India an attractive market to any investor. In fact, we find that India has been among the top destinations for private equity investments in the digital space since 2011.
Third, will Facebook corner the internet? It can certainly be a gigantic absorber of the new user’s time and attention. But, eventually, the value of what else is out there — even in a limited setting — will draw out the curious. Some will even purchase full access as disposable incomes rise because of the mere awareness of the wider internet. Past experience with giving people even limited awareness of the internet and access to knowledge and productive tools that are contextually relevant ought to give us confidence that it is better to make a modest start than wait indefinitely for perfect solutions.
Finally, public policy-led initiatives are slow-moving and muddled. The government’s Digital India is an ambitious plan with nine pillars and will be a painfully slow-moving process. The aim to provide publicly run facilities for internet access, at least one in every village, was first approved in 2006 and is still on a slow march. Mobile infrastructure is already inadequate. Before more people get on the internet on their phones, more spectrum is needed. The government has also made some reactionary moves in terms of internet freedom. The public alternative to private-sector initiatives does not give us a lot of confidence that the digital gap will be closed in the foreseeable future.
So if India is getting Zucked, it is a good thing. “It’s incredible what people can build — and what love can motivate us to build,” Zuckerberg wrote on his Facebook page recently. He was writing, of course, about his visit to the Taj Mahal. Within 40 minutes of posting the obligatory picture of himself looking at the ultimate monument to love, the post received close to 1,50,000 likes and 5,000 comments. If not love, I hope that Zuckerberg gets a few likes for his other labours. I, personally, cannot do so. I am not on Facebook.
The writer, senior associate dean of international business and finance at Tufts University’s Fletcher School, is the founding executive director of the Institute for Business in the Global Context
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