Zero Rating Policies From Internet Users in Three Peruvian Regions

This post was written by Roxana Barrantes and Daniela Ugarte, Principal Investigator and Research Assistant, respectively, Peruvian Studies Institute (IEP).

Overview of Research

As access to the internet, mobile phones, and computers has increased in Peru, so too has the diversity of offerings provided by Peru’s telecom operators. Most telecom operators in Peru offer zero rated services, with offerings subsidizing Facebook, Twitter, and WhatsApp being particularly popular. With support from Mozilla, researchers at the Instituto de Estudios Peruanos (IEP) sought to explore Peruvians’ understanding and use of zero rated services, how these subsidies affect their internet usage, and whether zero rated services are serving as an on-ramp to the internet. To explore these questions, 14 focus groups (FGs) were conducted in three Peruvian regions: Ayacucho, Lima and San Martin.

Key Findings

1. Zero rating plans are only used by smartphone users, mostly by young adults.

Among the FG respondents, zero rating plans are only used by those who already have access to smartphones, and are especially popular with young adults (18-29 years of age). Use is mediated by access and awareness. Young adults and those around age 30 are the most intensive mobile phone users, and thus are the demographic with the greatest access to zero rated plans (which are only available on mobile phones). This age group is also more likely to be aware of subsidized plans.

“Regarding the use of internet, let’s say, I changed operators because of the publicity and promotions that other mobile phone companies offered about services, let’s say, social networks, basically. Because, one way or another it avoids excessive expenses and continuous charges, you can just communicate through WhatsApp or Facebook. Personally, in my university it spread really quickly, let’s say, changing operators to get everything unlimited. And most of the classmates would find each other only through those networks and it was no longer necessary to call.” (Young woman, urban, Ayacucho)

2. Socioeconomic status greatly influences means of access to the internet.

Knowledge and use of subsidized data varies markedly based on participants’ socioeconomic status. The most cost-conscious users worry more about spending the least amount of data possible, while users from higher socioeconomic groups do not worry about limiting data use.

Respondents use different sites and services depending on the nature of their connection. They are more hesitant to access data-intensive services over a full-cost connection, preferring to do so over Wi-Fi. One young urban female respondent described the difference between data and Wi-Fi as such:

“It’s like, with my data is different for me to be online. I’m there and it’s all cool, but when I have WiFi, I can enter to download apps, or download music or search for some information. With data, I can’t do that…” (Young woman, urban, Ayacucho)

3. Respondents’ understanding of the internet is not conditioned by zero rating policies.

Research findings show that respondents’ understanding of the internet is not conditioned by zero rating promotions. Indeed, most respondents are unaware whether they have or use plans with subsidized data. Most respondents have already learned about the internet before using mobile data, as their first contact with the internet was primarily through computers. In other words, zero rated services did not serve to bring non-users online for the first time. However, users’ understanding of the internet is not only affected by their means of access and first exposure, but also their education level, and age. Respondents who have recently begun using the internet place greater emphasis on the negative aspects and hazards that come with use.

4. Zero rating policies do not significantly limit internet use or sites that users visit.

In general, the use of subsidized platforms represents only a part of mobile data consumption. Thus, nearly all participants who use zero rated plans also have access to the full, open internet, especially among higher-socioeconomic-status respondents.

Although users, especially those of lower socioeconomic status, visit subsidized services more, subsidized promotions do not limit the breadth of their internet use. That is because subsidized data does not address the three primary reasons that people use the internet: information search, entertainment, and communication–zero rating promotions focus mainly on communication. Likewise, it is important to note that patterns of internet use are also influenced by internet experience and personal life needs.

5. Access conditions (urban vs. rural, age, context of initial internet exposure, device(s) used) influence internet perception and use.

Access conditions influence the processes of internet understanding and adoption. The FGs demonstrate a gap in access conditions among urban and rural respondents. While in urban areas most of the participants have access to smartphones and computers, in rural areas there is scarce access to mobile devices or good connectivity infrastructure. This feature is accentuated in Ayacucho and San Martin, where computers, mostly from public access locations, represent the main points of access. These gaps dissipate for younger users (18-29 years of age) since they tend to use more devices.

6. Non-users face a series of barriers to internet access.

Most respondents who have not used the internet would like to, because they understand that it can help them find all kinds of information. Yet, they face many barriers to use. Rural respondents face expensive, poor quality connections or a lack of connectivity altogether. Many rural communities that do not have internet access also lack basic services such as electricity. Language and literacy too present a barrier; rural areas of Ayacucho are primarily Quechua-speaking with little literacy of internet-dominant languages.

Learning to use the internet demands time that respondents do not have; women indicate that their household work and childcare, in addition to work outside the home, leaves them little time to spend on such tasks. Even if respondents have time, there are not places or instructors to teach them, and even when there is sufficient equipment, many female respondents fear that they may “damage the machines” while learning. Reducing their perceived pressure to learn, non-users often rely on “hinge people,” family members who use the internet on behalf of non-users.

Navigating Affordability for Internet Access and Use: Kenya, Rwanda, Nigeria and South Africa Studies

This post was written by Chenai Chair, and first appeared on the Research ICT Africa Blog.

Knowing from previous research that affordability is one of the primary barriers to internet access, and particularly to optimal use, Research ICT Africa (RIA) conducted focus groups in Kenya, Nigeria, South Africa and Rwanda in November last year. The purpose of this Mozilla-funded research, one part of its Equal Rating project, was to obtain qualitative information that reflects the perceptions of female and male internet users, new users, and non-internet users – from different (urban and rural) locations. The study focused on how people used the internet when they had their data subsidised, and when it was not subsidised.

RIA had the opportunity to share some of the findings at the Mozilla Equal Rating challenge announcement of selected semi-finalists in Cape Town on the 17th of January. This blog responds to the following question raised at the event Jochai Ben-Avie, the Senior Global policy Manager at Mozilla:

“In other regions, (study also conducted in Peru, India, and Myanmar) we’ve seen use of subsidised services less as an on-ramp to the internet, and more as a way for people who already have access to the internet to manage their data and costs. Have you seen that in the four African countries you surveyed as well?”

In all the countries, across the different demographics, having access to subsidised data did not result significantly in new users going online. Subsidised data was taken to mean access to free or cheaper data either from zero-rated services, promotions from operators, or from accessing free Wi-Fi.

In fact, the motivations for going online in the various countries pointed to; connecting and interaction with other people; academic or professional development; as well as the ease of accessing information.

We did find the use of subsidised data to be part of multiple strategies employed to better manage data costs by the respondents in these four African countries.

Looking at free data and honing in on zero-rated Freebasics, we found a difference in adoption across the four countries. In Nigeria, where zero-rating was only introduced by Airtel last year, we found less service popularity among the respondents due to unawareness of the service and some respondents not trusting it was truly free. One respondent who had used it pointed out that they could not “go deep” with zero-rated Facebook so they opted not to use it.

While in Rwanda, for Airtel subscribers, they made use of bundles that came on with added on unlimited WhatsApp and facebook. This formed part of their data saving strategy. The respondents viewed this as a free service even though they had to pay some initial amount to enjoy the benefits. In Kenya and South Africa, the zero-rated services were welcomed for their cost-reducing nature. Interestingly, users of the service in Kenya and Rwanda would have multiple SIMS in order to gain access to promotions offered on other networks.

Mobile data plans

As mobile data is the main point of access for users, respondents bought airtime that promised promotional data as well as less-expensive, short-term data bundles (for example, lasting one week, a day or even less).

We have seen the growing popularity of these offers on the prepaid mobile market  – described as snack bundles – retaining and attracting lower-end customers. In Kenya, for example, participants in urban areas highlighted an awareness of shorter-term promotional data and airtime offers that then give you additional data for a limited time. One respondent claimed to be in the process of moving to another operator that offered these services as their operator at the time did not offer such affordable services.

One respondent in peri-urban South Africa stated that they make use of smaller bundles because they have access to smaller airtime amounts, which they then convert to data. They would need to travel to another location to get larger amounts of airtime to convert to data.

However, there was an awareness by some respondents that shorter-term bundles did not provide the same value as larger ones; though the low-price option was more suitable for that time. One respondent in Nigeria highlighted that monthly data seemed to finish before the month was out so they preferred shorter-term bundles.

Network Operator choice

All these strategies are dependent on the presence of an operator within adequate geographic coverage. In South Africa, one of the cheapest operators, Cell C, was popular amongst respondents in urban and peri-urban areas whilst the dominant and more expensive operators, MTN and Vodacom, were popular in rural and deep rural areas. This was because they were the only operators present in these remote areas with consistent coverage and good quality of service. In Rwanda, MTN the dominant operator, was popular across all geographical locations as their network was more reliable than the smaller operators: Tigo and Airtel. In Nigeria, respondents across locations complained of the quality of service of all operators resulting in the use of multiple sim cards. One respondent in rural Nigeria said they normally use one operator but switch to another when there is no coverage.

Going Forward

The full report delves into alternative options to internet access and use such as public Wi-Fi and what users do with their internet access. An internet use study is not sufficient without the analysis of barriers. The report will provide insight into reported barriers for users and non-users as well by the respondents. The geographical and gendered issues will also be discussed to assess the role of gender and location in impacting internet use. The full report will be launched at the end of February 2017.

Research ICT Africa will also be carrying out Beyond Access Household & Individual Surveys in all these countries this year to further assess the use issues in 2017.

Users’ Perspectives on Zero Rating in Myanmar and Implications for Net Neutrality

This post was written by Peter Cihon, Google Policy Fellow, LIRNEasia

Zero-rated promotions, including Facebook Free Basics, pose controversial challenges to net neutrality around the world. This debate has presented empirical questions that remain largely unanswered. Do users remain within the corporate-controlled walled garden, or do they freely exit and use the open internet? Does zero rating limit users’ perceptions of all the internet can offer? Such questions motivated our research in Myanmar to understand users’ perspectives on zero rating.

Researchers from LIRNEasia, a think tank working on ICT policy and regulation in the emerging Asia Pacific, completed fieldwork in July 2016. With funding from Mozilla, the Google Policy Fellowship program, UK Government’s Department for International Development, and the International Development Research Centre, Canada, we conducted focus group discussions with 63 mobile users and informal interviews with vendors and stakeholders across the Yangon Region. Important findings from our research are presented below; please see the full report for further analysis.

Using Zero-Rated Content

Two ongoing zero-rated promotions are the focus of our study: Myanmar Posts and Telecommunications (MPT) Free Basics, which launched in June 2016, and Telenor Free Facebook and Viber, which launched a month later. MPT Free Basics includes Facebook Flex, an image- and video-free version of Facebook, Messenger, Burmese Wikipedia, WikiHow, resources from UNICEF’s Internet of Good Things, and several local websites (see chart below). Telenor Free offers a 150MB daily data allowance to access Facebook with pictures and video, as well as unlimited Viber messages. While Free Basics is available to anyone with an MPT SIM card, Telenor Free lasts for a limited duration that increases with the amount of credit purchased.

Key Findings

1. Respondents are largely unaware of free content on Free Basics other than Facebook and Messenger

Although some 40 respondents report having used Free Basics, only four know of non-Facebook content within the platform. Respondents only actively use Facebook and Messenger on Free Basics.

2. Those who have used Free Basics use it infrequently; over half have stopped altogether in favor of paid data

Many respondents have stopped using Free Basics because of frustrations with a lack of photos and video on the free version of Facebook, slow data speeds, and an onerous user interface for switching back and forth between paid and free content.

3. Zero-rated content presents data-cost management strategies for users

Respondents pursue sophisticated data-cost management strategies that include using multiple SIMs, switching carriers for promotions, and using zero-rated services to access content for which they would otherwise pay. Several respondents use Free Basics regularly to manage data expenses by using free Messenger exclusively or limiting certain Facebook activity to free mode. Some Telenor Free users continue browsing Facebook by switching to MPT Free Basics after exhausting their daily free data cap on Telenor.

4. Contrasting user experience and content lead to different uses across zero-rated content promotions

In contrast to Free Basics, all respondents who tried Telenor Free continue to use it, and several have switched to Telenor from MPT for the new promotion. Users emphasize the appeal of free full-feature Facebook, and this content leads nearly all users to increase data consumption. Notably, several rural users began watching video for the first time on the promotion, and now use their entire free 150MB allotment each day.

5. Telenor Free ‘on-ramps’ respondents to paid consumption, but not to the open internet

Most Telenor Free users describe increasing data consumption and paying for this increase, but they only use the data to access Facebook.

6. Respondents commonly exit the zero-rated walled garden, but few distinguish between the walled garden and open internet

Most active zero-rated-content users also use other, non-subsidized internet services, including Google, news websites, and apps. Respondents describe following links from within Facebook to external websites. Exiting the walled garden is more common among urban respondents, but most rural respondents who use zero-rated content also use other applications online, commonly BeeTalk and Clash of Clans.

This behavior contrasts with perceptions: respondents often do not distinguish between zero-rated content and the open internet. The limitations of Facebook on MPT Free Basics serve to highlight the garden walls: respondents know when they are using zero-rated content or not. But the same cannot be said for Telenor Free. Several users—both urban and rural—describe the 150MB Facebook allotment on Telenor as general-use data.

7. For some respondents, Facebook is the internet

Although the contrast between free and paid Facebook on MPT is clear, users do not universally distinguish between Facebook—or other apps, for that matter—and the open internet. While urban respondents distinguish between the two, several rural respondents equate Facebook with the internet. This is observed, for example, as internet search for them means searching within Facebook.

8. Respondents are not satisfied with a perceived second-class internet

Given the choice between zero rating, limited data to access unrestricted content, or unlimited access to unrestricted content but at slow speeds, respondents prefer unrestricted content. Respondents express frustration at slow Wi-Fi and data speeds. Frustrations with limitations on Free Basics and the launch of an alternative with free full-content Facebook led several respondents to switch from MPT to Telenor.

MPT Free Basics Websites*
Website Local Content Burmese Language Respondents Know Of Respondents Use
Facebook Flex
Facebook Messenger
7 Day Daily (news)
Connect Smart
Free Books by Worldreader
Mathematics by TeachMe.com
Girl Effect
ShweProperty.com
JobNet.com.mm
All in-By and for Adolescents
Baby Center
WikiHow
Emergency Information
Facts for Life
MayMay (women’s health)

* at time of fieldwork

Earned reward applications: Users’ perspectives from India

This post was written by Gayani Hurulle and Helani Galpaya, LIRNEasia

“If someone clicked on that link, it was a lottery for him.” Sidharth*, a 19 year old undergraduate from Delhi, is not referring to an online casino, but instead to Taskbucks, an application that has allowed him to earn free data by referring the app to his friends.

Provision of free and subsidized data has become a key talking point in the internet policy arena. Indian policy makers prohibited its telecommunications service providers (TSPs) from providing zero rated content, what users recognized as “Facebook Fridays” or “WhatsApp Packs”, in early 2016. Its rationale was that TSPs should not be able to act as gatekeepers and subsidize access to selected websites or apps as it violated the principles of net neutrality.  The Telecommunications Regulatory Authority of India (TRAI) subsequently began searching for alternative means of providing free data, just without intervention from the TSPs.

mCent, Ladoo, Taskbucks, Champcash and Databack are examples of a workaround which we call “earned reward applications”. These services’ basic premise is that users will first download the app, and then engage in a series of micro-tasks through the application (app) to earn rewards.

How do users earn rewards?
Earned reward apps are varied and have different incentive structures– characteristics of a few are shown in Table 1.

Table 1: Earned reward applications: micro-tasks to earn rewards and type of rewards**

Name of app Micro-tasks to earn rewards Type of reward
Downloading/using sub-apps Referring app to friends through messaging services Funds to mobile wallet Mobile recharge
Main balance (Talk-time/SMS/data) Talk-time only Data only
Databack
Freecharge
Hike
Ladoo
Mango
mCent
PayTM
Taskbucks

Source: Google Play Store, LIRNEasia qualitative research (2017)

Providing mechanisms to earn rewards was the principal use of a number of apps. Many apps in turn allow users to download other-apps through it, to earn rewards — mCent, for example, rewards INR 37 (USD 1) to those who downloaded the Amazon app through its app. Apps like PayTM transfer rewards to mobile wallets. Some others provide mobile recharges; some apps will only provide data or talk-time recharges, while others recharge the “main balance” which can be used towards talk time, data and SMS.

Users’ perspectives were discussed through a series of focus group discussions in which 83 poor and middle-income respondents in Delhi spoke of their internet use experiences. The research commissioned by Mozilla was conducted by LIRNEasia, a regional think tank focusing on ICT policy and regulation, in December 2016.

1. Cost conscious consumers were skeptical
A number of respondents had heard of earned reward apps but were reluctant to use them. Soniya* spoke of how distinguishing between those which were authentic and those that were not would take too much time. Others were weary of the constant notifications they could receive once they signed up with the app.

Some said the data requirement to first download the app was too high.  The information asymmetry caused by users not knowing the data allowance required to download the app caused them to hypothesize as to whether the potential reward would exceed the cost. A respondent noted however, that it would be worthwhile if the app could be downloaded via a public Wi-Fi connection. This would allow him to download the app without incurring additional costs and then earn rewards, which could be used towards purchasing data in the future.

2. Difficulty in retrieving rewards and lack of content preventing long-term use
Sidharth* who likened his early experiences with an app to a lottery, spoke of how the returns from using the app had diminished over time and was thus disillusioned. Some respondents had little success in obtaining the rewards promised. Such experiences could have been due to a number of factors ranging from a faulty app to the users’ skills being insufficient to retrieve the reward.
Rishi* spoke of how the lack of sufficient sub-applications to download prevented him from using the earned reward app for a sustained period of time. He had used it a year prior to the fieldwork but had stopped subsequently as he had earned all the rewards. Sustainability in the use of applications may arise, particularly where users are rewarded for downloading sub-apps rather than for using them. Also, limitations may arise as users have to refer friends in order to earn rewards, since most “pyramid-like” reference systems have a limited shelf-life before collapsing.

Others complained about needing to keep a downloaded app for a certain period of time before rewards could be earned – a difficult thing to do for those who had phones with very limited memory.

3. Mobile e-commerce popular following demonetization– rewards earned through referrals
The use of mobile apps to engage in e-commerce was commonplace among respondents. In our sample, the use of PayTM was triggered largely by demonetization that occurred a month prior to fieldwork. Khushbu* stated that “The current use of PayTM is greater because of the currency issue. There is such a long queue in the banks.”

Some respondents used the referral system of PayTM and Freecharge to earn rewards; some used these apps to pay monthly utility bills, for which they received a rebate of INR 100 (USD 2).

Implications on Net Neutrality
TRAI banned TSPs from providing zero-rated content because it did not want TSPs to act as gatekeepers. At first glance it seems a new set of non-TSP gatekeepers have emerged – the earned rewards apps “nudge” users towards using and promoting certain apps, at least in theory. Yet our research showed that at least as of now, none of the users limited their Internet experience to the promoted ads. In fact they were savvy users, who “play the game” (i.e. download the promoted apps, referred friends) purely in order to earn monetary rewards, which they then converted to talk time/data/e-commerce transactions. In fact, their “regular” use heavily skewed towards social media and appears to not have changed due to these earned-rewards apps and the relevant rewards. So far, fears of a “tunnelling effect” on users seem premature.

*name changed
** at time of fieldwork

5 Semifinalist “Pitch” Their Solutions At Our Equal Rating Conference - Vote For Your Favorite!

“One point of connectivity can change the world.”
Gary Fowlie – Head, ITU Liaison Office to the United Nations

On 9 March, Mozilla gathered the Equal Rating Innovation Challenge semifinalists and judges, as well as industry leaders, NGOs, and the public in New York City for a day-long event dedicated to Equal Rating. The conference culminated in the “Demo Day” with the 5 Innovation Challenge semifinalist teams from South Africa, India, Brazil and Canada pitching their product solutions to the judges and the assembled audience.

After the welcome and introductory notes by Mark Surman, Executive Director of the Mozilla Foundation, Gary Fowlie, Head of the ITU Liaison Office to the United Nations, outlined the enabling role of information communication technologies can play in progressing the UN’s Sustainable Development Goals (SDGs). He also highlighted how more partnerships and projects on digital inclusion like the Equal Rating Innovation Challenge is critical to improving education worldwide.

Gary was followed by Dr Alison Gillwald, Executive Director of Research ICT Africa, who presented findings from field research in Kenya, Nigeria, Rwanda, and South Africa. Dr Gillwald explored the barriers users in these countries face when accessing the Internet, and showed how online behavior changes when data is subsidized.

Jeff Jarvis, Professor at the City University of New York’s Graduate School of Journalism (CUNY), added a journalist’s perspective to the conversation, arguing that improved digital media literacy and locally relevant content are critical to the health of the online ecosystem.  Jarvis advocated for an increase in intensive research on locally relevant content and a basic models of fair subsidy as a way to fundamentally change journalism for the better in emerging markets.

Mishi Choudhary, Legal Director, Software Freedom Law Center, closed the morning keynotes with a passionate plea to rethink the regulatory frameworks in the Global South to allow for the same rights and principles to get access, to “tinker,” and to be secure online.

In the second part of the conference, Mozilla’s Chief Innovation Officer Katharina Borchert moderated a panel discussion with the five esteemed Challenge judges, Omobola Johnson (Nigeria), Honorary Chair of the Alliance for Affordable Internet and Partner of TLcom Capital LLP and the first Communication Technology Minister of Nigeria, Nikhil Pahwa (India), Founder at MediaNama and Co-founder of savetheinternet.in, Rocio Fonseca (Chile), Executive Director of Start-Up Chile, Marlon Parker (South Africa), Founder of Reconstructed Living Labs, and Mitchell Baker (USA), Executive Chairwoman of Mozilla.

The discussion range from learnings from the Innovation Challenge to the role of governments and global players in shaping today’s access routes to the Internet. The panel also candidly explored critical topics such as Internet shutdowns and the dreadful harassment that especially women and minorities are often subjected to as part their (first) Internet experience.

The highlight of the Equal Rating Conference was “Demo Day” when the 5 semifinalists pitched their solutions to the judges. After having received 6 weeks of expert mentorship to further shaped their submitted concepts, each team shared their respective vision for a connected future. After each presentation, the judges had 10 minutes of Q&A where they pressed the semifinalists on issues such as scalability and business sustainability.

Our judges are now evaluating the semifinalist presentations and we would like to include your voice in the mix. We invite you all to watch the semifinalist pitches and cast your vote for what you think is the strongest solution. Voting is open until 16 March 23:59 GMT. The results of the community voting will be tallied and shared with the judges. The judges will consider these data along with the scoring matrix when they make their final decision.

What’s at stake? The total prize money for the Equal Rating Innovation Challenge is funding of USD250,000, divided into the following categories:

  • Best Overall (with a key focus on scalability): USD125,000
  • Best Overall Runner-up: USD75,000
  • Most Novel Solution: USD30,000

The winners will be announced at RightsCon Brussels on 29 March 2017.