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Zero rating: The key to internet accessibility

By July 27, 2016 No Comments

A few weeks ago I visited the GSMA head office in London. They are, quite rightly, promoting the social benefits of mobile, and the positive effect that the mobile internet can have in helping with education, medicine and the betterment of the billions of people who don’t have access to the internet.

This is not a new discussion. Being connected is now seen as a basic right. Google’s Project Loon and Facebook’s Aquila plan to broadcast Wi-Fi signals to provide connectivity to those who cannot access internet services. Indeed just last week Facebook announced that test flights of their solar powered planes, that will deliver Wi-Fi signals from 60,000 feet, are a success. What was once a pipe dream may become a reality sooner than many think. But access to Wi-Fi signals is only one part of getting everyone connected.  According to GSMA Intelligence the main issues is not lack of coverage.  In Asia 2.9 billion people are covered by 3G or 4G, but only 1.2 billion actively use mobile internet. The implication is that people are not using mobile internet for reasons other than coverage. It would be fair to assume that cost is one of the main reasons. In order to get people on-line, it needs to be affordable, and this is where something as (relatively) mundane as BSS comes in.

We’ve already covered the success of sponsored data in Brazil, using the example of Banco Bradesco which drove up number of mobile banking transactions just by making access to their app free of charge. There are many countries where data is expensive relative to available income. Large volumes of people have smartphones but no data plans, and as we’re seeing with the constant rise of Wi-Fi traffic the demand for mobile data is increasing.  This, and the fact that a large proportion of societies can’t afford to pay for data, represents an opportunity to drive up data adoption while at the same time achieving some social good. Operators can give the data away (in a controlled fashion) and get enterprises to pay for it.

One the most popular apps in relatively low ARPU countries like India, the Philippines and Brazil is mCent. This app is provided by Boston based company Jana. People download the app free of charge, watch ads and in return for watching ads get free data. According to Harvard Business Review Jana is now the second largest advertising platform in India. In countries where incomes are low and data is relatively expensive people will watch ads to get data. But the social benefits of being connected are significant. According to an article by Jana on The Next Wave, “When people living in emerging markets are connected to the internet, the number of people living on less than $1.25 a day decreases by a third. Access to the internet also increases the annual income for someone in an emerging market by $450 to $630, the equivalent of a 29 percent increase in per capita income for someone in India”. These are impressive stats.

In Brazil local authorities were looking at making mobile access to their information services free of charge, so people don’t use up their data allowance getting information from the local authorities. The driver was that mobile is cheaper than traditional advertising and communications. But making something free of charge doesn’t mean that people will spend their time using it.  They have to be more than free. As we’ve seen from the Jana example, in many low ARPU, low income countries a significant number of people will watch ads in exchange for data. So an opportunity could be for government agencies, education bodies, health providers, etc. in developing countries to promote a free data model, whereby people get rewarded with free data for watching public information clips, health education videos and so on. This would involve operators zero rating and controlling data usage based on whether or not consumers have watched the free healthcare or education video. The government, health agencies, etc. could come to a wholesale agreement with the operators. This could be spending part of their communication budget to subsidise the ‘free data’ that acts as the carrot to get consumers to watch their healthcare and educational videos.

This can only do good. But is that the sirens of the net neutrality police I hear? By giving free access to all of the internet – and not just selected apps, then operators are not favouring one app over another, which knocks the net neutrality argument on the head.

Zero rating may just hold the key to making the internet accessible.