Facebook has introduced its ambitious internet.org project in some of the develo
ID: 1169031 • Letter: F
Question
Facebook has introduced its ambitious internet.org project in some of the developing and less developed nations. With the help of this project, Facebook aims to provide free Internet services as a progressive step to connect the world virtually.
Visit www.internet.org and summarize the project based on your understanding of the services the project offers, and analyze the impact the project will have on the demand of services of other Internet services providers (ISPs) in the nations where it is launched. Support your analysis with the laws of demand and supply.
In your analysis, focus on the following questions:
Do you think the Internet services that internet.org project offer are actually free?
How big would be the impact of the services of internet.org on the demand of services of ISPs?
Will the impact be in the short term or sustain for a long term?
Is the perception of free services the only factor that will affect the demand of services of ISPs, or is
the associated brand name of Facebook also a major factor that will affect the demand of services
of ISPs?
Explanation / Answer
Internet.org is a tie up between Facebook and six other companies Samsung, Ericsson, MediaTek, Nokia and Opera and Qualcomm. It was launched by Facebook with the major objective to provide free accessibility to basic internet services is some developing and under developed countries. Facebook also claims that it has started this initiative to serve its goal of bringing the world closer.
Through internet.org app, poor people will be able to use basic internet services like Wikipedia, ESPN , BBC and many more. It aims at enhancing efficiency and promoting the development of new business ideas which revolve around internet.
Facebook claims its services to be absolutely free and also free from advertisements. But, as they say nothing comes without the price. Although the services are free for the consumers, many Internet Service Providers (ISPs) claim that intenet.org violates net neutrality as it has set up a dichotomy between the internet which is paid for and the free services provided by Facebook.
Critics also claim that due to this initiative one set of apps and services are favoured over another by discounting rather than raising prices. Also, it might not be very beneficial in the long run as it will starve out competition and eventually stagnate the market for available web services.
The impact of the services of internet.org on the demand of services of ISPs is believed to be huge. However, it will be realised in the long run. Of course, as people start using free mobile Internet services they might find the web fascinating and will be willing to pay for more services. Ultimately they will start buying smartphones, data plan or pre-paid SIM with Internet services. This explains the involvement of companies like Samsung, Ericsson, MediaTek, Nokia and Opera.
The free services and also the brand name of Facebook both are the major factors in boosting the demand for ISPs.
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