Indian Mobile Services Are Now Charging Users Like Cable Companies—One Site at a Time

"Unbundling the internet" could save consumers money by linking them to only their favorite websites.

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A user tops up on access. (Reuters/Mansi Thapliyal)

Indian mobile operators, in their attempts to get their low-paying consumers to use more high-margin data, have over the past year been breaking up the web into chunks to sell piece-by-piece to their consumers. So a wireless user might pay a fee to access YouTube or other video services, or have a special price just to use Facebook or Whatsapp.

Those who fear that this sort of thing might hand ever-greater power to large internet firms like Facebook and Google that can afford to make deals would call it a worrisome development. (Among those who presumably don’t like it are the advocates of net neutrality in the U.S.) Indian mobile operators would probably just call it “unbundling.”

The latest offer comes from Tata Docomo, a middling operator by the number of its users. This week, the company announced “YouTube recharge,” a way for pay-as-you-go subscribers with 3G plans to top up their data packages for a few rupees—but only for YouTube videos and live TV from a company called Apalya.

For Rs 9 (15 U.S. cents), subscribers can watch 100 megabytes (MB) of video—anything between one and 10 videos, depending on the length and quality—with 24 hours. For Rs 19, subscribers get 150 MB and three days, and a Rs 39 plan offer 300 MB over a week.

Other operators have tried similar ideas. Airtel, an multinational telco based in India, offers online video for Rs 1. Uninor, owned by the Norwegian telco Telenor, earlier this year started offering customers access to Facebook or WhatsApp on a daily, weekly, or monthly basis.

And it isn’t just the Indian market that is unbundling mobile broadband. In Africa, Airtel instituted a timed-access program that offers a variety of services, such as a two-hour pass to get online or access to Facebook only. MTN, a South African telco, launched a $44 smartphone that comes with a limited amount of free access to social networks.

The thinking behind all these moves is two-fold: First, new internet users in the poor world regularly cite Facebook, WhatsApp, and entertainment as their reasons for getting smartphones. Mobile operators see it as simply giving subscribers what they want at prices they will find attractive.

Second, it is also a more efficient way of distributing content and increasing revenue. In places where it is possible to bypass big cable companies and simply get the whole suite of available channels for a fixed price via small, local cable providers, as in India, that tends to work out cheaper for the consumer. But if cable companies can persuade subscribers that it is better and cheaper for them to get a basic package and then add on extra channels for a fee—though a zero to low marginal cost to the provider—that’s a much better deal for the companies. Mobile broadband in the poor world is treading the same path.
 

This post originally appeared on Quartz. More from our partner site:

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About the Author

  • Leo Mirani is a reporter with Quartz in London.