Internet.org’s Business Model Doesn’t Suit XL Axiata

The availability of Internet.org in Indonesia which features Indosat is a big question. One of main issues would be that XL Axiata, the first Facebook’s partner for this campaign, drew back from their partnership because, one of its executives said, they didn’t share the same business model.

As being cited form IndoTelko, XL’s Chief Digital Service Officer Yessy D. Yosetya revealed the very reason behind the withdrawal:

“There are two things that contribute to XL’s withdrawal from Internet.org campaign. First, the program remains a controversy, just like what happened in India. Second, it’s about the business model.”

It turned out that, Yosetya claimed, although Facebook asked for free access, XL had to cover all the marketing expenses. With more than ten websites can be freely accessed, the marketing cost would surely surpass the trial period. This made XL withdrew from the deal.

During the trial period, XL indeed got more customers, but not loyal data subscribers. As we know that data subscription is the spearhead of current telecommunication businesses after the utilization of phonecalls and SMS keeps decreasing.

Internet.org was launched in Indonesia five days ago by allowing free access to a number of websites through Internet.org’s special app which is available in Android version. So far, a number of local startups have joined the campaign, including Tokopedia and Kelase.

In India, Internet.org drew negative responses due to the net neutrality issue that it even forced several partners to withdraw their supports and head for the exit.