New Delhi: The free data offer rolled by billionaire Mukesh Ambani’s Reliance Jio Infocomm has contributed significantly to Facebook’s strong fourth quarter numbers, with India being the social media giant’s “strongest” growth market by user base, the US company has said.
Facebook Inc Wednesday posted fourth quarter revenue of $8.81 billion, which includes $1.35 billion from the Asia region, sharply higher than the $5.84 billion it posted a year ago. Net Profit for the quarter to December came in at $3.57 billion, more than double the $1.56 billion it posted a year back.
Speaking at its earnings call, Facebook CFO David Wehner said the company’s growth in Asia was boosted by the free data being offered in India. “In the fourth quarter, wanted to call out that we have seen an increase in third-party promotional free data plans in places like India,” Wehner said. He was referring to the free data being offered by new telecom entrant Jio , which entered the market in early September. and does not charge for its voice and data services in a bid to attract users. Jio’s free services, on offer till March 31, have also forced incumbent telcos to slash data prices as well.
“So that (free offer) clearly is having an impact in APAC (Asia-Pacific) and India was our strongest growth market (by user base). So, that would be something that I would say was a little bit more unique this past quarter,” Wehner said.
At fourth quarter end, Facebook had 165 million monthly active users in India, largest in the world after the US. The California-headquartered company saw an 18% year-on-year consumer base growth to 1.23 billion daily active users that include 396 million from Asia.
A recent study by Smartapp had pegged Facebook as the biggest beneficiary of the free data offer from Reliance Jio. The finding revealed that Facebook logins had surged to 467% after the new entrant Jio started free promotional services.
The second biggest beneficiary according to Smartapp, are video apps such as YouTube, Hotstar, Amazon Prime and Netflix, which together have seen a jump of 336%. The social Internet giant is also expected to ramp-up hiring and is likely to invest more in video content, the company said.
Facebook CEO Mark Zuckerberg added that the company’s focus would be on generating short original videos, especially professionally created content.
India is an important market for the US-based company as the Internet usage is catching up to the levels of mobile penetration which has though crossed 1 billion mark but wireless broadband user base still stands at 218.26 million in November 2016, according to the telecom regulator Telecom Regulatory Authority of India (Trai).
A finding by Statista reveals that by 2021, there will be about 635.8 million Internet users in India, with an estimated 358.2 million social network users in India. India’s current Internet user base is nearly a third (33%) of the 1.32 billion population.
Way back in 2015, Zuckerberg, in a town hall with the Indian students said that nearly a billion people in India had no access to the Internet yet and if you care about connecting everyone in the world, you can’t do that if there are so many people who don’t even have access to basic connectivity.
The company though received a setback when its ambitious “Free Basics” program, formerly known as Internet.Org, to provide free limited Internet access to the Indians came under fire from consumer activists and the regulator, arguing that the initiative violates principles of net neutrality. The regulator subsequently barred such zero-rated services in India.
But Facebookis aiming to bridge India’s urban-rural digital divide through various other programs such as Express Wi-Fi together with state-run BSNL to bring affordable Internet access to rural India.
The Zuckerberg-driven company has also started initial discussions with the Indian telcos and the government to potentially undertake a pilot program for solar-powered drone called Aquila to offer bandwidth for affordable mobile Internet access in India’s rural and remote areas.