Facebook Inc (NASDAQ:FB) initiative of offering free internet services for select websites under the internet.org project continues to arouse debate on its benefits and repercussion especially on the telecom industry. Speaking at the Mobile Web Conference, India’s Bharti Airtel chief, Sunil Mittal, said Facebook initiative was good, but telecom operators should also be considered as the same is expected to affect their revenues and charge for services.
Facebook Inc (NASDAQ:FB) has partnered with Airtel Africa for free internet services in some African countries as well as Reliance Communication in India. The giant social network maintains that bringing more people online via free internet services should initially be good for the industry; something that industry experts don’t agree on.
Facebook Inc (NASDAQ:FB) free service has already had its fair share of ripple effects in the telecom industry with many companies complaining of reduced revenues from SMS’s as well as voice calls as more people opt for the free services. Mittal believes governments will have to do more in reducing the costs for spectrum as well as networks if the free internet services are to be sustained in the long term without affecting telecom company’s earnings.
The remarks by Mittal come at a time when there is a fierce competition in India for Spectrum with bids of about RS. 86000 crores already tabled. Telecom companies argue they are being forced to invest billions of dollars on spectrum, network, and infrastructure while companies like Facebook Inc (NASDAQ:FB) continue to offset their marketplace without bearing any investments of their own.
Mittal expects investments in the mobile networks to go down as Internet-based messaging and calling services continue to tap into telecom firms market share. UK-based telecom giant Vodafone CEO, Vittorio Colao, also took a swipe at Facebook Inc (NASDAQ:FB)’s new service arguing that Zuckerberg was playing philanthropy with their money.
Telecom operators have continued to complain about the effects of the emergence of Over-the-Top OTT firms like Facebook Inc (NASDAQ:FB)’s WhatsApp, Skype and Viber. Those claims to be helping them grow their business while on the other hand continue to disrupt their revenue bases. Airtel was forced to withdraw separate charges for internet based calling services after an outcry in social media even though it the costs were exactly the same as those for normal voice calls.
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