Airtel, Jio Tariff Hike Led To Facebook’s Loss In India! Find Out How?
Facebook’s parent company Meta reported its first ever quarter-to-quarter drop in daily active users in its history.
Its growth in India has slowed too.
1st Time Drop In Daily Active Users
In the previous quarter it experienced a small but notable drop in its daily active users from 1.930 billion to 1.929 billion.
Analysts were expecting it to report 1.95 billion users.
Its monthly active users globally in the fourth quarter stood at 2.91 billion which was the same figure as in the previous quarter.
The company’s underwhelming performance caused its stock to sink as much as 22%.
Its user growth in India slowed during the last quarter of 2021, affecting its overall user growth.
It said that this happened partly due to a hike in prepaid plan tariffs.
Meta CFO Dave Wehner said that user growth in India was hit by an increase in prices of data packs along with “competitive services” which has also negatively impacted growth with younger audiences.
Data Price Hikes And Reduced Usage
Bharti Airtel, Reliance Jio and Vodafone Idea increased the prices of data plans by up to 25% in the last quarter.
Jio announced a 20% hike in prepaid tariffs from Dec 1.
Airtel had announced 25% hikes with effect from Nov 26.
Vodafone Idea did the same, announcing 25% hikes effective from Nov 25.
The telcos believe that these hikes will improve their ARPU or average revenue per user and address the financial stress faced by the industry.
Vice-president of research at Counterpoint Research Neil Shah says that this may have made consumers more careful with their data usage.
OTT And Binge Watching
Outside India, Meta blamed Apple’s privacy changes and increased competition from rivals such as TikTok for causing its active users to decline.
In India it faces more competition from OTT players than from short video platforms since many Indians binge-watch shows on their smartphones.
This eats into their time they would have otherwise spent on Facebook, Instagram and WhatsApp which Meta also owns.
Apple Posing Challenges
Apple could also be behind the social media giant’s views and engagement dipping.
It had its best year in India yet, adding 6.5 million users.
Although this amount may seem small, it reflects a shift in premium Android customers to Apple, perhaps for its stricter privacy norms for apps like Facebook.
Meta CEO Mark Zuckerberg highlighted the company’s work on business messaging in India, an area he considers to have “real” momentum.
He estimates over a billion users using business accounts across Meta’s messaging services every week.
Customer Convenience Through WhatsApp
It has also partnered with Uber and JioMart.
Users can now avail the services of these companies directly through WhatsApp.
India is an important market for Facebook since it has the largest number of active users of any country.
As of October 2021 Facebook is reported to have 349.2 million users in India.
Meta invested $4.5 billion in Reliance-owned Jio Platforms last year and announced a partnership between Reliance Retail and WhatsApp.
Short Form Video
Meta is also betting big on Reels, its short video offering which became an important focus and investment area in 2022.
They expect short-form video to be a major part of how people consume content in the future.
Reels is also Meta’s fastest growing content format and the biggest contributor to engagement growth on Instagram.
It is said to be achieving quick growth on Facebook as well.