Indian online retailer Flipkart has abandoned a plan to give customers of mobile operator Bharti Airtel free access to its mobile app after criticism that the move posed a threat to net neutrality.
Earlier this month, Airtel launched a marketing platform, Airtel Zero, that allows app developers to pay for their customers to access their services without data charges. The move was, however, criticized by activists as a threat to net neutrality in the country, putting Internet startups and smaller players that can't afford the fees at a disadvantage.
Flipkart's CEO Sachin Bansal said on Twitter recently that the so-called zero-rating deals reduced data costs for users.
But on Tuesday the company announced it was walking away from talks with Airtel. "We will be working towards ensuring that the spirit of net neutrality is upheld and applied equally to all companies in India irrespective of the size or the service being offered and there is absolutely no discrimination whatsoever," the retailer said in a statement.
Other companies have also signed deals with operators that provide free access to their websites or apps. Reliance Communications, for example, teamed in February with Facebook-backed Internet.org to offer free access to some websites including that of the social networking company.
Indian Internet users are particularly sensitive to the move by Airtel as it comes a few days after the Telecom Regulatory Authority of India released a consultation paper on the regulatory framework for Internet applications and services that ride on mobile operators' networks.
The paper pointed out that services such as voice-over-IP and messaging, which it refers to as "over-the-top" (OTT) applications and services, were directly competing with the operators' main businesses in international calling and SMS. While more apps like WhatsApp and Skype increased data usage by consumers, the TRAI paper wondered whether it adequately compensates the operators.
TRAI invited comments on a number of issues, including whether the OTT players should pay for use of the network over and above the data charges paid by consumers, raising user concerns that the new rules would place more costs on smaller OTT companies and even require users to pay for the use of certain popular apps.
A resolution to the issue will require that operators are adequately compensated to continue to invest in infrastructure and spectrum, without sacrificing the principles of a free Internet, said Kamlesh Bhatia, executive partner at Gartner.
Even as customers are using data more heavily on Internet applications and services, the operators are not able to increase their data tariffs because of fierce competition in this market from other operators, Bhatia added.
"The regulator has to find some balance between these interests," he added.