Wednesday, October 14, 2015

Facebook: Hijacking the Digital world.

Digital India campaign is one of the most marketed campaigns of the Government of India (Mr.PM is a great Marketer). The aim of Digital India campaign is providing connectivity to rural India. India has been slow on adapting to new technology thanks to various factors like geographical size, population, very primitive distribution network and resistance to change. The recent visit of probably the most famous PM of India to the Facebook headquarters made it into the news as the new advent of the Digital age in India.

Facebook has come out with an amazing initiative for the digitization of the population of the world, who have low or no access to the internet. Facebook has promised to give free internet access to all the people who do not have enough means to access the internet. Governments around the world are really psyched about such a benevolent initiative by Mr. Mark Zuckerberg. Mark’s vision of connecting the whole world with the internet should be applauded. Each and every person in 3rd world countries will one day be connected with the internet through A step towards the development of the society across the world. And the best part? Everything is for free!!!
But wait, how come Mark attained such benevolent attitude towards the 3rd world countries where people don’t even know what Facebook is? Maybe he finally spent some time at some Indian Temple and got enlightened? Someone rightly said in business nothing is free, “If anything is free then you are the product sold.” Now let’s do a little market analysis. All the telecom companies (who are already cash crunched) are welcoming the step by Facebook. Question is, “If the companies are in financial crisis, will they really care to give public everything for free?”  Let’s see how these companies became cash crunched at the first place, I hope everyone know about the 2g spectrum scandal? Yes, the companies had to pay huge amount to repurchase the spectrum. But another very big reason for this is, WhatsApp. Yes, the little app you use for texting and sharing your beautiful moments of your life with people whom you love. The Telcos have been crying foul in front of the government for charging for such apps. WhatsApp first ate into the SMS market by allowing the people to text as well as share media, more recently however they are killing voice call market for the companies by introducing voice call over the internet. The companies are finding it difficult to earn their revenue. Hence telecom companies are trying to hike the price of the internet plans, but due to the price sensitivity of Indian population they saw a steep fall in consumption of mobile data. Now we can clearly see that Facebook  has been killing the business of the Telcos in India, then why the same companies are standing with Facebook for which essentially tells them to give the mobile data for free (Their big source of  Income).
Let’s see what’s there for Telcos, Facebook will be paying these telecom companies instead of the Indian population. (The Telcos are happy either way.) The question is why? Why Facebook is paying in place of the rural Indians. Let us first understand how Facebook earns its revenue? Facebook earns the revenue for reaching the ad campaigns of the companies to the masses. So let us stepwise understand how Facebook is planning for world domination:
1.     Facebook is providing internet for free, so everyone in the country has the right to get network access for free. That means a large amount of public will have access to Facebook for free. What does that mean for Facebook? REACH! Doesn’t sound too bad right? They should get at least something out of this, but wait there is more... Keep reading.
2.     Facebook is making a closed internet for itself where it will only put what it wants and what it likes you to see, and why not? You are not paying for it! So better take what you get!
3.     The catch is, when you want to access anything outside you will have to pay extra cash for the accessing the website, just as you have to do for the television card.
4.     Differential pricing will come into play, and then our internet expenses will look fragmented into several pieces. So, instead of paying say Rs.300 for one internet pack, we will end up paying Rs.100 for messenger services, Rs.50 for Social Networking websites and Rs.150 for Entertainment and Rs.100 for file sharing websites...and so on. (Some might argue this is not going to happen, but in fact it is..the Telcos will have an excuse for increasing the price of anything outside stating it as extra load on the companies)

Too complicated right? That is what the companies want it to be. Let me simplify it for you, like listening to stories?

“Raju is a gentleman who spends Rs.300 every month on data. He buys the data pack on 1st of the month and uses the data allotted to him as he sees fit usually watching videos, playing games, chatting, social networking and blogging. One fine day the differential pricing came into play, now Raju (Still a gentleman, but a sad one) has to pay Rs.100 for accessing Social Networks, Rs 150 for entertainment, Rs. 50 for games, Rs.100 for News and so on... The cumulative price of availing all the services goes well above Rs.300 every month. Even after that he has some websites left out and if he wants to visit those he has to pay for it separately.”

Hope the story made it clearer.

5.     We would have to pay more for everything which is outside the forcing the price sensitive Indian population to stay inside The companies signing up for will have large amount of reach, but then you will have to pay a hefty amount for availing the same. (Every company wants to reach the masses, isn’t it?)

6.     Inside; Facebook makes a controlled environment where Facebook controls even the speed at which your browser loads a website. So, if Facebook doesn’t want your browser to load a website, it will slow down the website. Directly affecting the revenue of such websites, forcing these companies to pay whatever Facebook wants.
7.     With huge amount of reach Facebook will make sure that there is NEVER another Facebook again. Because if there is a start-up it will have no other option than to come to Facebook for the marketing. Because till then the people will be used to using internet for free and then they would not want to pay extra for accessing the website they don’t even know.
8.     If the start-up seems to compete with Facebook in near future it would have no other option than to die, because in no way Facebook will allow the company to market itself. Hence they will be forced to either close shop or sell business to Facebook itself. Facebook as a company has huge amount of cash on its balance sheet, care to know why? Because Facebook wants to make sure that it can either kill or acquire any new start-up which looks like a threat, WhatsApp is the biggest example of such a start-up. (Facebook knows where to invest, apparently)
9.     Facebook will then dominate economies around the world after making people used to free internet, controlling the market and how the companies market themselves.
We sure want a Digital India; it is one of the best campaigns of Indian government, though India has other big issues to solve like poverty, hunger and illiteracy. Digital India is not the digital India how Mr. Mark wants it to be. Its okay to pay a minimal amount to avail what is right than availing what is free. It’s better not to get digitized than to have such access to internet in which your knowledge is controlled by some firm. Where a firm can control what you can know and what you cannot. It’s like being under a rule of a dictator.
Some of the people I came across had an argument for why Facebook will not do it. They said, “Because India is a very big market for Facebook and it will not do such a thing to risk its business.”  First things first, “Business IS RISK” . And moreover remember US is the one of the biggest markets for Volkswagen, they still managed to bypass the US environment laws for years.
Expecting Facebook will not cheat because it has a good brand image in your eyes is like expecting your spouse can never cheat on you because you trust him/her. Ever heard of “The 7 year itch”?
P.S- I personally support Digital India and keep my internet router without password.

P.P.S- I have an unlimited internet plan.

The image used in the article has been taken from Google image search.