Reliance Jio’s free data make big contribution to Facebook revenue growth in Q4 revenue

The free data offer rolled by Indian billionaire Mukesh Ambani’s Reliance Jio Infocomm has contributed significantly to Facebook’s strong fourth quarter numbers, with India being the social media giant’s “strongest” growth market by user base, the US company has said.

Facebook Inc. Wednesday posted fourth quarter revenue of $8.81 billion, which includes $1.35 billion from the Asia region, sharply higher than the $5.84 billion it posted a year ago. Net Profit for the quarter to December 31 came in at $3.57 billion, more than double the $1.56 billion it post a year back.

Speaking at its earnings call, Facebook CFO David Wehner said that the company’s growth in Asia was boosted by the free data being offered in India.

“In the fourth quarter wanted to call out that we have seen an increase in third party promotional free data plans in places like India,” Wehner said. He was referring to the free data being offered by new telecom entrant Jio which entered the market in early September and does not charge for its voice and data services in a bid to attract users. Jio’s free services, on offer till March 31, has also forced incumbent telcos to slash data prices as well.

“So that (free offer) clearly is having an impact in APAC (Asia-Pacific) and India was our strongest growth market (by user base). So that would be something that I would say was a little bit more unique this past quarter,” Wehner said.

At fourth quarter end, Facebook had 165 million monthly active users in India, largest in the world after the US. The California-headquartered company saw an 18% year-on-year consumer base growth to 1.23 billion daily active users that include 396 million from Asia.

A recent study by Smartapp had pegged Facebook as the biggest beneficiary of the free data offer from Reliance Jio.

The finding revealed that Facebook logins had surged to 467% after the new entrant Jio started free promotional services.

The second biggest beneficiary, according to Smartapp, are video apps such as YouTube, Hotstar, Amazon Prime and Netflix, which together have seen a jump of 336%.

The social Internet giant is also expected to ramp-up hiring and is likely to invest more in video content, the company said.

Facebook CEO Mark Zuckerberg added that the company’s focus would be on generating short original videos, especially professionally created content.