Airtel provide internet access through different mediums. It is one of the largest private sector internet service provider in India through airtel broadband. It also offer mobile internet services through EDGE, 3G and 4G LTE route.
One of the emerging issues related to internet access is network neutrality. Network neutrality basically means that your internet service provider has to treat all kind of internet access in the same fashion.
Airtel has a long history of going against this concept which is yet to become a law in India…
One of the earliest step was when they collaborated with YouTube to offer online access to Indian Premier League matches at 2mbps connectivity at no extra charge to all their customers. IPL matches streamed online from YouTube were broadcast at 2mbps no matter what speed user was supposed to get according to his internet plan. This step was pro-consumer but still went against the concept of network neutrality. Airtel was treating traffic from a specific internet source differently from other sources. The data used in this transmission was still being counted from the user’s allocated quota.
The biggest step taken by airtel that goes against network neutrality is when they started throttling bittorrent protocol during the day time. This practice is still ongoing. Users get heavily throttled speeds during the daytime if they try to download anything using torrents. This applies to legal downloads like if you are trying to download Ubuntu ISO as well. We can consider this as something Airtel does to manage the QoS on their network. But they should be doing it during periods of heavy network congestion. Having a fixed time for throttling cannot be considered as a step taken to ensure quality of service to the end user especially when all their unlimited plans are still heavily restricted when it comes to overall data consumption.
The latest and the most worrying development is a statement made by a senior airtel representative in the media. Jagbir Singh, Director, Network Services Group, Bharti airtel has been quoted as saying in the media:
Today, Google, Yahoo! and others are enjoying at the cost of network operator. We are the ones investing in setting up data pipes and they make the money. There is interconnection for voice then why not for data. Network is capital intensive, we have to pay for spectrum and voice revenue is coming down. At the same time, companies like Google, which have not invested more than a few billion dollars, are enjoying valuations that are ten times that of a traditional telecom player. It’s an unfair game. They are completely bypassing the telecom operator. There should be a fair revenue share.
So now, Airtel want specific online services to pay them for enabling their users to access their services. This is again a case of preferential treatment as they are only targeting a specific group of web services and asking them to pay them to offer their services on Airtel’s network.
This is a very worrying development considering the following factors:
Airtel already charges a lot of money for internet access from their subscribers. They have some of the costliest internet plans in the country. You could be paying as high as 200-300 rupees per GB of data transfer. Industry sources reveal that the cost of bandwidth in India is generally lower than Rs. 5 per GB. Even if we add on all other expenses, internet delivery is an extremely profitable business for the company.
Online services like Facebook and Google are already paying for bandwidth in data centers to the ISPs like Airtel. They have to operate or lease data centers around the world to ensure that connectivity is smooth for global internet users, and as one of India’s top-3 wholesale bandwidth suppliers, Airtel already makes money from online companies operating through data centers here in India.
Targeting Google and Facebook specifically is just a sign of greed. Network neutrality states that you treat all web services as equal. You do not pay for losses made by Company A, why should you expect a share in profits from Company B?
Airtel peers with and hosts caches from companies like Facebook, Google and several Content Delivery Networks which significantly reduces their data transfer costings - as it is retrieved from a local source rather than from abroad over the expensive International cables. This is good for Airtel because it reduces their cost of providing service, and good for the end user because it makes the connectivity faster while remaining completely transparent.
Basically, Airtel makes money from consumers as an internet service provider. They make money from online services through data center operations. And they charge smaller ISPs for leased lines which those ISPs then re-sell. And now they are asking for share in revenues from profits made by the companies providing the content, even if those companies are not Indian and even if Airtel is already peering with them for content at virtually no cost? Seriously? How greedy one has to be?
Airtel has a fair usage policy on all their unlimited plans. Which means that the user gets the advertised speeds for a specified amount of data transfer. After that the speeds are lowered heavily. The end result is that the consumer is incapable of abusing their network.
Airtel claims that looking at how much they have to spend on network expansion and other areas, they deserve to get a share of the revenue generated by popular web services like Google and Facebook.
This is absurd from a lot of angles. Airtel is just a middleman providing their services and charging a lot for it. They have no right to interfere in what the end user does with these services as long as they are not breaking the law of the land. If we are to go by airtel’s logic, there are other services as well who deserve a cut… your power supplier, your computer hardware manufacturer and so on.
Here is a comparable analogy… You trade in stocks through a broker. You pay him a fee on every transaction. But the broker does not have a right to ask for a percentage of the cut in your profits. He charges for a service and gets paid for it. Whether you make money or not through those services is none of their concerns.
Airtel here is seeking the same.
This article was written with inputs from Mathew Carley.