Telecom data war helps Facebook grow in India

Jio launched in Sept last year kicked off a war with its offer of six months of free mobile data

India became the fastest growing market for social networking giant Facebook in the three months that ended December, sparked by the war between telecom companies to win customers by offering free mobile data.

Mukesh Ambani’s Reliance Jio, which was launched in September last year, kicked off a war with its offer of six months of free mobile data. The country’s largest service provider, Airtel, rose to the occasion with its own offers on free and subsidised mobile data in order to conserve its customer base.

“In the fourth quarter, one of the callouts that we’ve seen (is) an increase in third-party promotional free data plans in places like India. So that clearly is having an impact in APAC and India was our strongest growth market,” said Mark Zuckerberg, founder and CEO of Facebook, in a call with investors and analysts on Thursday.

While global internet giants such as Facebook are reaping the benefits of increased data usage in India, spurred by freebies, the Indian telecom sector has plunged into turmoil. In the quarter ended December, Bharti Airtel reported a 5.3 per cent drop in revenues and 9.5 per cent drop in profits.

Facebook reported that it had a user base of 142 million in India as of March 2016, with 133 million of them accessing the service through mobile devices. India is the world’s fastest growing smartphone market with over 250 million data subscribers and 300 million smartphones.

Idea Cellular, the country’s third largest telecom service provider, is currently exploring a merger with larger rival Vodafone, largely believed to have been pushed by falling margins in the Indian telecom sector due to Jio. Operators now are bracing themselves for a winter in the sector, with earnings expected to remain subdued for the next few quarters.