Indonesian telco explains why it ditched Zuckerberg’s Internet.org

Internet.org, the app initiated by Facebook’s Mark Zuckerberg that allows people to access certain online content for free, launched in Indonesia just a few days ago in partnership with Indosat. So far it seems as if Internet.org has had a smooth start in Indonesia, and is not struggling with the huge backlash it’s getting in India.

In India, some media outlets and internet firms that had initially been part of the Internet.org initiative decided to step out due to concerns about violating net neutrality with the app’s limited, curated selection of accessible sites.

In Indonesia, net neutrality has not surfaced as a mainstream debate, and prominent local entrepreneurs like William Tanuwijaya from Tokopedia continue to support Internet.org. Tanuwijaya is Indonesia’s poster child self-made man through internet entrepreneurship. Coming from a modest family background, he taught himself about the internet and entrepreneurship during his night shifts working at an internet cafe. His Twitter profile banner exclaims “build a better Indonesia, with the internet!”

See :Tokopedia CEO William Tanuwijaya wants to turn Jakarta into the next Silicon Valley

But what Internet.org offers is not the internet, critics in India and elsewehere have argued, and the program’s preferential treatment of certain services is counterproductive to the ideals of a free internet because it puts those who are not included at an unfair disadvantage.

XL Axiata quits

The net neutrality debate could still flare up in Indonesia, perhaps unwittingly initiated by mobile phone carrier XL Axiata. XL had partnered with Facebook during Internet.org’s research phase in Indonesia last year, but then decided not to continue the partnership. Internet.org, once it was ready for its official launch, was then rolled out in partnership with another carrier, Indosat. This move surprised those who had been following the scheme.

Yessy D Yosetya, the chief digital services officer of XL Axiata, has revealed the reasons behind XL’s decision to quit, as reported by IndoTelko, a site that covers the Indonesian telecommunications industry.

Yosetya says there were two things that held XL back from partnering up with Zuckerberg’s Internet.org initiative in its current form. “First, this program is still controversial, one example is what it happening in India,” he told IndoTelko. “Our second concern is about the business model.” Yoseta goes on to explain that Facebook requires XL to apply zero-rating to the data transfer through Internet.org, as well as to carry the marketing costs. Zero-rating is a term applied to the practice of not charging the end customers for data transfers through certain apps or services. “So, it’s us who bears it all,” Yoseta told the site.

Not humanitarian

IndoTelko also notes that XL, in September 2014, had tested mobile SIM cards that gave users a packet of IDR 5,000 (US$ 0.38) worth of free data to access Facebook. But XL was not satisfied with the performance of this card, which they hoped would eventually lead to an increase in consumer interest in XL’s data plans.

This makes it seem as if XL’s reason for not partnering with Internet.org was in part because it did not believe in the app’s potential as an efficient upselling gateway.

But Indosat, which is now Internet.org’s partner, cites this very potential as their main reason for joining. In a previous article on IndoTelko, a reporter spoke with Sharif Mahfoedz, Indosat’s division head of data services. Mahfoedz is crystal clear about the company’s intentions to use Internet.org as a gateway to sell data packages.

“We have an upsell program in which if users exit the free sites they will be offered subscription based packages.” he told IndoTelko. “The main goal of this program is to get users of 2G networks connected to the internet, and after that they are encouraged to switch from pay-per-use to buying data packages.”