“For India to keep making progress, it needs to be a leader online,” Narendra Modi, PM said during the Facebook event. He acknowledged that tech companies like Facebook were not connecting people out of pure altruism, but he told Zuckerberg, “I hope this will not just be something to enhance your company’s bank balance.”
Two years ago, India’s rise as a digital nation was hard to imagine. Internet penetration was modest, mobile phone networks were glacially slow, and smartphones were a blip in a sea of basic phones.
Since 2013, however, the number of smartphone users in India has ballooned and will reach 168 million this year, the research firm eMarketer predicts, with 277 million Internet users in India expected over all.
India already conducts more mobile searches on Google than any country besides the United States. Yet “we are barely scratching the surface of availability of Internet to the masses,” said Amit Singhal,Google’s senior vice president in charge of search, who emigrated from India to the United States 25 years ago.
Indians have long loved to connect with one another online, accounting for much of the growth of early social networks like Friendster. So it’s not surprising that Facebook already has 132 million Indian users, trailing only the United States.
But Facebook’s presence in India runs even deeper. WhatsApp, the messaging service that Facebook bought last year for nearly $22 billion, has become the most popular app in the country, offering free texting and free phone calls in a place where many people earn just a few dollars a day. Facebook’s Messenger app is No. 2, according to the analytics firm App Annie.
To reach those people, Facebook is offering basic versions of its service that work on simple phones and slow networks. Under an umbrella initiative called Internet.org, Facebook is also working with a local cellphone operator to offer a package of free services, including news, job listings and text-only versions of Messenger and its social network aimed at those who cannot afford a data plan.
India still poses many challenges. Internet.org has come under fire from regulators and activists who are concerned that Facebook is favoring its own services. And despite Modi’s outreach, government agencies are trying to censor content they consider unfavorable or offensive. Last year, Facebook received 10,792 requests from the Indian government to remove information, far more than from any other country.
Making money is also difficult in India, where the amount spent on digital advertising is expected to total about $940 million this year, according to eMarketer — a fraction of the $58 billion that is expected to be spent in the United States.
While revenue is tiny so far, Internet companies say they are playing the long game, focusing on getting more people online now and profiting later.
Google, for example, wants 500 million Indians online by 2017. Most of these newcomers will be using phones powered by Google’s Android operating system, which accounts for most of the Indian smartphone market. That will let Google expose these users to its other services, like search and YouTube, as well as plenty of ads.