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Friday
Apr012016

The race to connect the next billion, and the business models to get there

Google and Facebook both have a mission – to “connect the next billion,” as Google puts it. This Financial Times article, “Facebook, Google and the race to sign up India,” explores the tech giants’ initiatives that are “bringing internet access to India’s masses as a way of alleviating poverty, improving education and creating jobs.”

Google, in partnership with NGO Tata Trusts, is sending thousands of tech-connected bikes to women in rural Indian villages. (In these regions, women are much less connected than men.) The bikes, loaded with two Android smartphones and two tablets, educate women about using the internet, and these women can then pass their knowledge on to other villages. Google also aims to launch its pilot technology, “Project Loon” later this year, sending balloons into the sky that will provide internet connectivity to remote areas. Additionally, the company, through a partnership with India’s railway ministry, is in the process of rolling out high-speed wifi to a hundred train stations this year.

Facebook, on the other hand, has been heavily focused on its “Free Basics” program. This program, an app that is part of the social network’s Internet.org initiative, offers users of partner telecoms networks free access to Facebook and a number of other well-known sites (Wikipedia, BBC News, Accuweather, etc.) Since it’s 2004 launch, 38 countries have come on board.

Both companies’ goals are echoing those of the United Nations’ 2030 Agenda for Sustainable Development, which includes an aim of universal internet access. What’s notable is that these tech giants aren’t using funds they’ve set aside for corporate social responsibility, rather they’re driving these initiatives with money from their core budgets. This speaks to their belief that connecting the unconnected is more than just a charity effort, rather that there is “solid business logic of investing in connectivity in India and other developing markets,” according to the Financial Times article, and a benefit for both companies to gain a first movers advantage in these regions.

Despite their grandeur and reputation, these companies still face challenges developing business models that incorporate their social impact efforts. Recently, Facebook’s Free Basics app was blocked by India’s telecom regulators, after they ruled that “differential pricing” by internet companies infringes on the principles of net neutrality. While the ban wasn’t targeted specifically at Facebook, it has created a major roadblock for the company. However, the tech giant isn’t ready to wave the white flag allowing Google to take the lead in this race to connectivity just yet, saying it plans to pursue other connectivity projects in the region.

-- Clara Shen

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