Finally, some research on Zero Rated offers and users. And it’s surprising.

Posted on October 22, 2015  /  0 Comments

The raging debate on Zero Rated content is, for the most part, taking place in a vacuum of evidence. A successful campaign by activists  ensured that many of the 1.2 million responses sent to TRAI’s proposed net neutrality regulations in April 2015 called for banning (Facebook’s Zero Rated offering, now called Free Basics).  The fear that the poor who use the free version of the internet offered by Facebook will not use anything else but Facebook has been one of the harms many advocates put forth.  Interestingly, research we conducted well before the ZR phenomena that showed people though Internet=Facebook has been used by both sides of the debate to their advantage.  My position has always been that we don’t know enough, and that we need a lot more evidence about what people really do when they come online through a free (Zero Rated offering) for the first time vs when they come online otherwise (through a “full” internet bundle).  Do they stay within the walled garden? Does their use evolve to become consumers of the “full Internet”?

Finally, we have some evidence.  Amba Kak, who recently completed her MSc degree at the University of Oxford looked at how users are responding to “Facebook/ WhatsApp” data packs in India through interviews with 20 users, 11 mobile recharge shop retailers and marketing executives from 4 telecom operators that offer these bundles. Her methods are qualitative, so not representative of India or even the young urban users.  But through sound research (studying the users and interviewing telecom operators), her thesis finds some unusual and interesting findings:

> Less experienced, low-income users prefer an open, unlimited internet. While they stated it was still early to conclude, marketing executives across telecom operators revealed there had been poor response to the Whatsapp/Facebook bundles.Interviews with users echoed this rejection. The cheap Facebook/WhatsApp bundle was only attractive to those who had alternate means of accessing the “full” internet (i.e. those who had access at home or at university).  For their mobile phones, they were happy to just have limited and cheap/free access.  While those who didn’t have alternate access forms and only had their phones wanted to experience the full internet and din’t find the limited date bundle attractive.  This puts into question the idea that for newer users social media is all they want from the internet. Critically, this preference is strong enough for most to have rejected zero-rated plans in favour of all-access plans – even when the latter are more costly

> Other existing innovations in data pricing had been more successful in responding to the needs of these financially constrained users (compared to limited access/Zero Rated bundles). The short duration (1-7 days), unlimited access plans appeared to be the most popular. Whether it was the person who wanted to put his village “on the map”, quite literally, or the many young students who spent nights awake downloading and watching movies on their mobile screens, or the one who “discovered” Wikipedia through exploration over a few months—I learnt that the next generation of adopters are young and curious about the ability of the internet to materially benefit their lives. Limited access curtailed this ability. In other words, for these users “some access is better than none”, but the trade-off they are willing to make is how much they use the internet, not necessarily how much of the internet they get to use.

> Lack of clarity about billing was an important factor that emerged from interviews. Those with low clarity on mobile data pricing complained that zero- rated plans would imply heightened risk of unexpected charges, a risk they were unwilling to take.Marketing executives corroborated that this “confusion” was one reason for the poor response. Even mature users who had this clarity seemed suspicious of telecom companies cheating users and falsely billing them without fault. In this context, restrictions only meant more confusion.Given that this is dissuading users from re-subscribing to these plans, this is clearly a situation where the Indian mobile operators are not helping themselves by leaving their consumers confused.

We need a lot more research that is systematic and representative. But Amba’s research already shedding an interesting light on the topic. Read her full thesis here

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