Prepaid data hike in India slowed user growth, admits Facebook

The prepaid data price hike by Indian telecom players hit Facebook's overall growth in the country in the fourth quarter of 2021, the company has revealed.

In November, leading telecom players Bharti Airtel, Reliance Jio and Vodafone Idea increased prepaid tariff rates by up to 25 per cent.

Meta CFO Dave Wehner said in a company quarterly earnings call that Facebook user growth was impacted by a few headwinds in the fourth quarter.

"In Asia-Pacific and Rest of World, we believe Covid resurgences during prior periods pulled forward user growth. User growth in India was also limited by an increase in data package pricing," he informed late on Wednesday.

"In addition to these factors, we believe competitive services are negatively impacting growth, particularly with younger audiences," Wehner added.

Following Vodafone Idea (VIL) and Bharti Airtel, Reliance Jio Infocomm Limited announced a hike in prepaid tariff rates by as much as 20 per cent, effective from December 1.

Airtel announced that prepaid tariff rates will be increased by up to 25 per cent with effect from November 26 Vodafone Idea also increased rates by up to 25 per cent, effective from November 25.

According to them, the move "will start the process of ARPU (average revenue per user) improvement and help address the financial stress faced by the industry".

Wehner further said that it was a little bit unique in the quarter in areas like India, where "we saw data plan pricing increase lead to slower growth there".

"So that's another kind of unique element of the quarter on that front," he noted.

According to Counterpoint Research Director Tarun Pathak, the prepaid data price hike impacted the social media platforms and Facebook was hit among those.

"There are millions of prepaid users in India and new users are fast joining the internet revolution with affordable entry-level smartphones. After the prepaid price hike, their social media usage declined which affected Facebook's growth in a price-sensitive market like ours," Pathak told IANS.

According to third-party data from Statista, there are over 350 million Facebook users in India alone, making it the leading country in terms of Facebook audience size.

Meta-owned WhatsApp has more than 400 million users in the country.

For the first time ever, Facebook has lost daily users globally, reporting lower-than-expected ad growth that sent its stock plunging nearly 20 per cent.

The massive stock drop instantly wiped out roughly $200 billion in its market value.

The Meta-owned Facebook platform registered 1.929 billion daily users in the fourth quarter of 2021 -- from 1.93 billion in the previous quarter.

The company confirmed that it is the first sequential decline in its history.