Free Bharti Airtel's "Airtel Zero": Violation of Net Neutrality? Case Study Solution | Assignment Help

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Written by Gary F. Smith
Publish Date: 2024-10-03

Harvard Case - Bharti Airtel's "Airtel Zero": Violation of Net Neutrality?

"Bharti Airtel's "Airtel Zero": Violation of Net Neutrality?" Harvard business case study is written by Susmi Routray, Boishampayan Chatterjee, Gunjan Malhotra. It deals with the challenges in the field of General Management. The case study is 11 page(s) long and it was first published on : Jan 6, 2016

At Fern Fort University, we recommend that Bharti Airtel reconsider its 'Airtel Zero' program due to its potential violation of net neutrality principles and the significant negative impact it could have on the company's brand image, customer trust, and long-term growth prospects. Instead, Airtel should focus on developing innovative, value-added services that benefit all users and align with the principles of an open and neutral internet.

2. Background

This case study focuses on Bharti Airtel, India's leading telecommunications company, and its controversial 'Airtel Zero' program. This program aimed to provide free access to specific websites and apps, effectively creating 'fast lanes' for select content while potentially slowing down or blocking others. The program sparked widespread debate and criticism, raising concerns about net neutrality and its implications for the future of the internet in India.

The main protagonists in this case are:

  • Bharti Airtel: The company seeking to introduce 'Airtel Zero' as a means to attract customers and generate revenue.
  • Consumers: The end users who could benefit from free access to certain platforms but potentially face limitations on their internet freedom.
  • Content providers: Businesses and organizations whose websites and apps could be affected by the program, potentially facing disadvantages compared to those favored by Airtel.
  • Regulators: The government bodies responsible for overseeing internet access and ensuring a fair and open internet for all.

3. Analysis of the Case Study

This case study can be analyzed through the lens of several frameworks, including:

Strategic Framework:

  • Porter's Five Forces: The case highlights the competitive intensity in the Indian telecom market, with Airtel facing pressure from other players like Reliance Jio. 'Airtel Zero' was a strategic move to gain a competitive advantage by offering a unique value proposition. However, it overlooked the potential for backlash from competitors and regulatory bodies.
  • SWOT Analysis: Airtel's 'Airtel Zero' program presented both strengths (attracting customers, potential revenue generation) and weaknesses (violating net neutrality, damaging brand image). External opportunities included the growing demand for internet access in India, while threats included regulatory scrutiny and potential consumer backlash.
  • Competitive Strategy: Airtel's 'Airtel Zero' program aimed to differentiate itself from competitors by offering free access to select content. However, this strategy ultimately proved unsustainable due to its potential for creating an uneven playing field and undermining the principles of a free and open internet.

Ethical Framework:

  • Business Ethics: 'Airtel Zero' raised serious ethical concerns about fairness, transparency, and the potential for discrimination against certain content providers. The program could have created an unfair advantage for favored platforms, potentially stifling innovation and competition.
  • Corporate Social Responsibility: Airtel's actions went against the broader principles of corporate social responsibility, which emphasizes ethical business practices and contributing to the well-being of society. By potentially hindering the free flow of information and innovation, 'Airtel Zero' was detrimental to the long-term interests of the internet ecosystem.

Legal Framework:

  • Net Neutrality: The program directly challenged the principles of net neutrality, which advocate for equal treatment of all internet traffic. The potential for discrimination and preferential treatment raised concerns about the future of internet access in India.
  • Regulatory Compliance: Airtel's 'Airtel Zero' program faced significant regulatory scrutiny, with the Telecom Regulatory Authority of India (TRAI) ultimately issuing regulations against zero-rating programs that violate net neutrality.

4. Recommendations

Bharti Airtel should:

  1. Abandon the 'Airtel Zero' program: This program is fundamentally flawed and goes against the principles of net neutrality, potentially harming the company's brand image, customer trust, and long-term growth prospects.
  2. Focus on innovative, value-added services: Airtel should instead invest in developing services that benefit all users, such as improved network infrastructure, faster speeds, and innovative data packages that cater to diverse needs.
  3. Embrace the principles of net neutrality: Airtel should publicly commit to upholding net neutrality principles and ensuring equal treatment of all internet traffic. This will enhance the company's reputation as a responsible and ethical player in the digital ecosystem.
  4. Engage with stakeholders: Airtel should proactively engage with consumers, content providers, and regulators to build trust and transparency. This includes actively participating in discussions about net neutrality and demonstrating a commitment to a fair and open internet.
  5. Invest in digital literacy and education: Airtel can play a positive role in promoting digital literacy and education, empowering consumers to understand the importance of net neutrality and the benefits of an open internet.

5. Basis of Recommendations

These recommendations are based on the following considerations:

  1. Core competencies and consistency with mission: Airtel's core competency lies in providing telecommunications services. By embracing net neutrality, Airtel can align its actions with its mission to connect people and enable digital inclusion.
  2. External customers and internal clients: The 'Airtel Zero' program alienated a significant portion of Airtel's customer base, including those who value internet freedom and those who rely on open access to information. Internal clients, such as content providers, also felt disadvantaged by the program.
  3. Competitors: By focusing on innovation and value-added services, Airtel can differentiate itself from competitors in a way that is sustainable and beneficial to the broader internet ecosystem.
  4. Attractiveness ' quantitative measures: While 'Airtel Zero' might have offered short-term gains, the long-term consequences for Airtel's brand reputation and customer trust are significant. The potential for regulatory fines and legal challenges further underscores the risks associated with the program.

6. Conclusion

Bharti Airtel's 'Airtel Zero' program was a misguided attempt to gain a competitive advantage. It violated the principles of net neutrality, damaged the company's reputation, and undermined its long-term growth prospects. By abandoning the program and embracing a commitment to an open and neutral internet, Airtel can regain customer trust, enhance its brand image, and position itself for sustainable success in the evolving digital landscape.

7. Discussion

Other alternatives not selected include:

  • Continuing with 'Airtel Zero' with modifications: While this might have appeased some stakeholders, it would still have violated net neutrality principles and risked further regulatory scrutiny.
  • Focusing solely on regulatory lobbying: This approach would have been reactive and could have further damaged Airtel's reputation.

Key risks and assumptions:

  • Regulatory landscape: The regulatory environment surrounding net neutrality is constantly evolving. Airtel must remain vigilant and adapt its strategy accordingly.
  • Consumer sentiment: Consumer attitudes towards net neutrality are complex and can shift quickly. Airtel needs to monitor public opinion and respond appropriately.
  • Competitor actions: Airtel's competitors may adopt similar strategies, creating a challenging competitive landscape. Airtel must be prepared to respond effectively.

8. Next Steps

To implement these recommendations, Airtel should:

  • Develop a comprehensive communication strategy: This should include public statements, engagement with stakeholders, and educational initiatives to clarify Airtel's commitment to net neutrality.
  • Invest in research and development: Airtel should invest in developing innovative, value-added services that benefit all users and align with net neutrality principles.
  • Establish a dedicated team to monitor regulatory developments: This team should ensure compliance with evolving regulations and proactively engage with policymakers.
  • Conduct regular performance evaluations: Airtel should track key performance indicators (KPIs) related to customer satisfaction, brand reputation, and regulatory compliance to assess the effectiveness of its strategy.

By taking these steps, Airtel can demonstrate its commitment to a fair and open internet, build a more sustainable business model, and contribute to a positive digital future for all.

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Case Description

In April 2015, Bharti Airtel - India's largest telecom provider and a leading global telecommunications company - launched Airtel Zero, an open marketing platform that would allow Airtel customers to access mobile applications with zero data charges. Application developers would pay Airtel to join the platform, but would in turn attract more users to their products. Immediately after its launch, Airtel Zero was subjected to severe criticism on the grounds that it violated the net neutrality principle, which advocated that content should be available to customers without any form of prioritization. Subsequently, in support of net neutrality, Flipkart - a prominent Indian e-commerce company - pulled out of the platform. Was Airtel Zero a potential threat to net neutrality? With the pending decision of the government of India on the regulatory framework for over-the-top (OTT) applications and services, would Airtel Zero stand out as a viable platform?

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