Update: I have made certain changes in the excel keeping in mind the new revelation that data cost to biz is several times higher than what consumers pay to the Telcos. That skews the ROI against Airtel Zero further. Download here

Following up on my article on the cost Flipkart may have to bear on Airtel Zero, I decided to extend it further by decoding the ROI effectiveness of the Airtel Zero platform.

Since there is a strong debate on how Airtel Zero is not violating Net Neutrality, I decided to look at this new “marketing platform” from a pure ROI perspective & let startups decide.

In one Twitter exchange yesterday, Anand from Airtel claimed that the platform might have 60% less cost per acquired user. (BTW, I really appreciate the effort Anand took to explain Airtel’s stand on this)

So I took to excel again & tried to create a simple ROI model:

Note: Airtel in its press release has mentioned Rs.1/MB cost which, if true, is scary and even more damaging to the ROI. Again the 20MB assumption has been taken from Airtel release only

While in isolation, Airtel Zero doesn’t look like a good acquisition channel, I decided to simulate numbers for three different Apps with varied monetization models.

This model is just to compare the overall ROI and in no way representative of an actual revenues you may make from this App base

Advantage Airtel Zero: Free Organic downloads + Higher Sessions but that’s where the cost starts to hit you ☺

Please Note, that the above model only takes into account the cost of month 1. Airtel Zero will continue to cost the startups based on usage so returns will further deteriorate.

I am including the excel sheet used to arrive at the numbers above. Feel free to tweak the data, add your own numbers and see the returns. Download the sheet

Important: I made a small mistake in the table above in calculating the sessions. Only Airtel sessions would see increase. Made a correction to the excel directly which you can download here. Also there are 2 sheets in excel with slightly different assumptions based on feedback recd on Twitter

I will be happy to hear your feedback on this. Feel free to comment here or tag me on twitter @deepakabbot or mail me at dabbot@gmail.com