Facebook (FB) Stock: So What is Zuckerberg Up to in India?

Facebook founder and CEO Mark Zuckerberg is making it his mission to reshape the internet, one developing country at a time.

Facebook stock

Mark Zuckerberg has been traveling to developing countries to make internet more accessible in rural areas. Facebook’s latest effort to bring the internet to the farthest regions of the world has taken shape as “Express Wi-Fi” in India. Facebook Inc (NASDAQ:FB) has confirmed that the Express Wi-Fi is in the early stages of testing through “multiple local ISP partners”.

According to the BBC, Express Wi-Fi has completed a trial period in the country via a state-run telecom. Facebook also set up about 125 rural Wi-Fi hotspots.

Express Wi-Fi is a program that allows phone users to purchase data from local internet service providers. The social media giant will provide software that helps ISPs and entrepreneurs sell and provide internet services in rural areas via public Wi-Fi hotspots.

“We are testing Express Wi-Fi program in India currently that allows customers to purchase fast, reliable and affordable data packages from their local ISP (internet service providers) to access the Internet via local hotspots,” a Facebook India representative said.

This would be the second time Facebook attempts to offer connections to India, one of the fastest growing countries in Asia. But unlike its previous effort to make internet accessible in India, this service is not free.

Last year, Facebook launched a free internet program called Free Basics only to face substantial regulatory roadblocks, leading to the banning of the service by India’s Telecom Regulatory Authority due to “violations of internet neutrality.”

Because the service offers free access to the web, it has won over customers who cannot afford internet service plans, causing conflict with users who pay for internet.

Following the banning of Free Basics, Zuckerberg released a statement, affirming the company’s commitment to providing low cost connectivity to developing countries. “While we’re disappointed with today’s decision, I want to personally communicate that we are committed to keep working to break down barriers to connectivity in India and around the world,” Zuckerberg said. “Internet.org has many initiatives, and we will keep working until everyone has access to the internet.”

According to Ian Fogg, an analyst at IHS Technology, the social media firm is offering connectivity in hopes of turning people into Facebook users, rather than competing with other telecoms.

“In emerging economies, Facebook is pursuing an intervention strategy to increase the pace of internet and online usage because this will also raise the addressable market for Facebook,” he told the BBC.

India is an important market for Facebook with 33% or 462 million of the populace with internet access according to IAMAI. Cheap internet is one way to attract India’s vast market and this will do a world of difference to Facebook’s stock.

On the last trading day, Facebook Inc. traded 20.14 Million shares with a closing price of $125.15. The firm’s gross margin stands at 85.10% while its return on investment (ROI) is 8.40%. Facebook’s stock value has moved $71.93 – 127.7 in last 12 months.

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