• Friday, March 29, 2024
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Lessons for Nigeria as India wins in Facebook’s $5.7bn investment in telco

Lessons for Nigeria as India wins in Facebook’s $5.7bn investment in telco

Facebook’s $5.7 billion purchase of 9.99 percent of the digital assets of Reliance Jio, making it the largest minority shareholder in the company, is a massive win for India’s telecommunication sector which holds lessons for Nigeria in seizing opportunities.

The investment is supposed to help Facebook leverage the reach of Reliance’s Jio Platforms and WhatsApp’s 400 million local users to connect small businesses and consumers in Asia’s third largest economy.

The announcement comes after many years of unsuccessful efforts by Facebook to tap into India’s internet market, a feat it rather achieved without stress in Nigeria.

Like Nigeria, Facebook had in 2015 approached the Indian government offering to provide internet access starting with a community called Chandauli where a local non-profit (Digital Empowerment Foundation) had helped galvanise a digital transformation through education.

Facebook’s entry strategy was through its newly minted Free Basics. According to the social media giant, Free Basics (also known as internet.org) is a platform that gives developers the opportunity to make their services and websites available free of cost to those who cannot afford internet access. The participating websites are stripped of photos and videos and can be browsed without paying for mobile data.

Read more Zuckerberg in Nigeria: Lessons from USA and India

As part of attempts to promote Free Basics, Zuckerberg had flown to India, where he received a warm welcome from the Indian media, politicians, and even audience with the country’s Prime Minister, Narendra Modi. Over the course of 2015, several Facebook and Internet.org executives made several trips to India, meeting with the country’s lawmakers and government regulators.

Actually, Mark Zuckerberg renamed internet.org to Free Basics in September, 2015, just ahead of Prime Minister Narendra Modi’s visit to Facebook’s headquarters at the invitation of the CEO.

As much as Zuckerberg tried to sell Free Basics to Indian authorities, the opposition to it kept growing. A group of activists accused Free Basics of violating net neutrality and put pressure on regulators to ban it.

A Global Voices report in 2017 showed three problems with Free Basics: it could not adequately serve the linguistic needs of local populations; it also featured a glut of third-party services from private companies in the US; and finally, the app was harvesting huge amounts of metadata about users and violating the principles of net neutrality.

Net neutrality upholds the principle of neutrality for all types of data on the network. In other words, Internet service providers (ISPs) should provide access to all content and applications regardless of the source, and without favoring or blocking specific products or websites, voice or video. In India, for instance, Facebook provided restricted internet access to Reliance Telecom’s subscribers. In Nigeria, the company partnered with Airtel.

Contrary to the neutrality principle and much to the consternation of Indian regulators, the Free Basics enabled Facebook to partner with ISPs to provide preferential and selective pass on the four questions in the regulator’s consultation paper and also blocking access to the Telecom Regulatory Authority of India’s designated email for feedback on Free Basics.

“Facebook is not introducing people to the open internet where you can learn, create and build things,” said Ellery Biddle, advocacy director of Global Voices. “It’s building this little web that turns the user into a mostly passive consumer of mostly western corporate content. That’s digital colonialism.”

By rejecting Facebook’s Free Basics overtures, Indian regulators not only entrenched its neutrality stance, it also built the confidence of operators in the telecommunication sector, local business community and consumers that their interest comes first.

Fast forward to April 2020, that decision has paid off in the form of a fat cheque to an India telecom operator from the same company it denied in 2016. It is Facebook’s biggest investment since WhatsApp.

Interestingly, a year after India banned Free Basics, the population of people on the internet in the country grew by 34.4 percent. Today, with over 560 million internet users, India is the second largest online market in the world, ranked only behind China, according to Statista. By 2021, there will be over 600 million internet users in India.

That $5.7 billion investment in Reliance Telecom may well represent a lost opportunity for Nigerian authorities who were too star-struck when Zuckerberg came calling with Free Basics, to properly analyse and understand the long term impact on Nigeria’s telecommunications sector.

For many Nigerian operators and policy makers, visits by global technology companies is often seen as a validation of the energy and vibrancy of the country’s tech industry, thriving despite infrastructural challenges. However, short-term wins are not a sure sign of sustainable growth. Almost in every instance, Nigerians do not project enough into the motivations and intentions of foreign players, resulting in a few highly placed persons happily truncating the country’s future growth over pennies. This is arguably a continental challenge.

Due to the speed of adoption in Africa, Zuckerberg told the BBC he would be sticking to Free Basics on the continent. Apart from Nigeria, Eleven other African countries contribute a significant part of the over 40 million people currently using Free Basics.

Free Basics in Nigeria, unfortunately, has not lived up to the wild dreams it was painted in 2016. On its launch in Nigeria, people could only access the platform if they were Airtel subscribers. In 2017 it tried to enlist Etisalat (9Mobile) but the services were still limited. Today, little is heard about the partnerships with the telcos as Facebook has since moved on to other mostly philanthropic-like projects in Nigeria. But Nigeria deserves more than donations.

Nigeria remains an important market for Facebook at least in Africa. As of 2020, the country accounts for 27.1 million users on Facebook data from internetworldstats.com showed, which makes Nigeria the second largest market in Africa for Facebook. Nigeria also has the largest internet users market in Africa.

In view of Nigeria’s strategic potential for Facebook on the continent some experts say a deal with a local telco is not far away.

“The Facebook move in India means that an Africa telco deal is not far along,” Victor Asemota, founder of SwiftaCorp said. “What if they decide to reduce MTN’s majority stake in Nigeria with a stock swap and end all of MTN’s woes with the government and bring a new dynamic into the payments game locally with WhatsApp?”

While a large ticket investment remains in the realm of conjectures, Nigerian regulators can do a better service to the telecom sector by not getting carried away by Zuckerberg’s stardom when he comes calling.