“digital colonialists” in India

FT journalist Hannah Kuchler explains the challenges that Facebook and Google face in the Indian market. Here is a small sample of her long, informative column.

Silicon Valley companies, led by Google and Facebook, are arriving with the key to a vital resource of the 21st century: connectivity. Wary of some of their tactics and rhetoric, Indian critics have dubbed the US companies “digital colonialists”. ….

Executives from both Google and Facebook talk with missionary zeal about bringing internet access to India’s masses as a way of alleviating poverty, improving education and creating jobs. Yet their motives are complex. Internet companies have the power to shape lives, governments and economies in ways that purveyors of more straightforward consumer goods do not. They often operate in what economists call “winner-takes-all” markets, meaning that, once established, companies benefit from a network effect: the more people who use an app, the more attractive it becomes, leaving little room for local competition. The fate of Facebook’s “Free Basics” app, which was effectively banned by India’s regulator last month, offers a glimpse of the broader battles that could lie ahead, across the developing world, as companies tussle to win the loyalty of billions of future internet users. ….

Facebook’s most high-profile project has been “Free Basics”, a mobile app that is part of the social network’s Internet.org initiative. Facebook uses the app to offer the customers of partner telecoms networks free access to Facebook and a basic selection of other sites such as Wikipedia, BBC News, AccuWeather and health sites. Since its launch in Zambia in 2014, Free Basics has been introduced to 38 countries including India (with Reliance Communications), Kenya (with Bharti Airtel) and Indonesia (with Indosat). The company is also working with telecoms groups to connect more villages to wifi, selling time online through neighbourhood entrepreneurs. It, too, has an aerial project: building solar-powered drones to connect remote areas. ….

The activists [opposing “Free Basics”] argued that telecoms companies should not be able to provide some sites or apps for free while charging for all other internet use, because by doing so they would create a two-tier system of access to the internet.

Hannah Kuchler, “Facebook, Google and the race to sign up India“, Financial Times, 19 March 2016 (metered paywall).

See also Ms Kuchler’s three-minute FT video “The race to get India online” (not metered, but free registration is required).

San Francisco-based Hannah Kuchler covers social media and cyber security for the Financial Times. Her Facebook user name is HKucher.

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