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Pakistan temporarily blocks social media

By Manish Singh

Pakistan has temporarily blocked several social media services in the South Asian nation, according to users and a notice reviewed by TechCrunch.

In an order titled “Complete Blocking of Social Media Platforms,” the Pakistani government ordered Pakistan Telecommunication Authority to block social media platforms including Twitter, Facebook, WhatsApp, YouTube, and Telegram from 11am to 3pm (9.30am GMT) Friday.

The move comes as Pakistan looks to crackdown against a violent terrorist group and prevent troublemakers from disrupting Friday prayers congregations following days of violent protests.

Earlier this week Pakistan banned the Islamist group Tehrik-i-Labaik Pakistan after arresting its leader, which prompted protests, according to local media reports.

An entrepreneur based in Pakistan told TechCrunch that even though the order is supposed to expire at 3pm local time, similar past moves by the government suggests that the disruption will likely last for longer.

Though Pakistan, like its neighbor India, has temporarily cut phone calls access in the nation in the past, this is the first time Islamabad has issued a blanket ban on social media in the country.

Pakistan has explored ways to assume more control over content on digital services operating in the country in recent years. Some activists said the country was taking extreme measures without much explanations.

What kind of national emergency we are dealing with that govt banned entire social media temporarily? These arbitrary decisions of blocking and banning have never done any good instead opened ways to blanket bans.

— Nighat Dad (@nighatdad) April 16, 2021

Update: Telegram raises $1BN+, including $150M from Mubadala and Abu Dhabi CP via pre-IPO convertible bonds

By Natasha Lomas

Update: Telegram has now announced it’s pulled in over $1BN in debt financing by selling bonds.

Founder Pavel Durov put out an update via his official Telegram channel after a press announcement earlier today had revealed the company had taken in $150M from Mubadala and Abu Dhabi Catalyst Partners by selling 5-year pre-IPO convertible bonds.

It’s not clear where the additional millions in debt funding are coming from — Durov merely writes that Telegram has sold bonds to “some of the largest and most knowledgable investors from all over the world”.

“This will enable Telegram to continue growing globally while sticking to its values and remaining independent,” he goes on, adding that the $1BN debt cushion will also be used to implement a monetization strategy he set out in December — when Durov wrote that “a project of our size needs at least a few hundred million dollars per year to keep going”.

He also committed not to sell Telegram, reiterating then that he wants it to remain independent.

Monetization would be non-intrusive, he pledged too, saying any future move to monetize large one-to-many channels through ads would see benefits flow back to the community — such as in the form of “free traffic in proportion to their size” — while future content sales (like premium stickers) would also entail contributing artists getting “a part of the profit”. “We want millions of Telegram-based creators and small businesses to thrive, enriching the experience of all our users,” was Durov’s pledge in December.

Now he’s got the debt war chest to execute the plan.

Our original report follows below… 

Messaging platform Telegram, which recently passed 500 million monthly active users but still isn’t monetizing all the digital chatter it hosts — has taken in a little more funding to keep its engines ticking over.

Mubadala Investment Company, the Abu Dhabi-based sovereign investor, is throwing in $75M in exchange for 5-year pre-IPO convertible bonds of Telegram — with Abu Dhabi Catalyst Partners investing a further $75M, the pair said today in a press release.

The investment is touted as a strategic partnership, with Mubadala anticipating benefits for Abu Dhabi’s startup ecosystem by having a local Telegram presence drawing in skills and talent to the capital.

Per Reuters Telegram will be opening an office in Abu Dhabi following the investment — building out its regional presence from a Dubai, UAE base.

Commenting in a statement, Pavel Durov, Telegram founder and CEO, said: “We are honoured by the $150M investment into Telegram from Mubadala and Abu Dubai Catalyst Partners. We look forward to developing this strategic partnership to continue our growth in the MENA region and globally.”

To date, Telegram has been bankrolled over a seven+ year lifespan by Durov, who made ~$300M from selling his stake in the vk social network he also founded — aka Russia’s ‘Facebook’ — back in 2015.

But sustaining a messaging platform with half a billion users can’t be done through billionaire bootstrapping alone.

Some additional investment did come in via Telegram’s recent attempt to launch a blockchain platform. However the effort was derailed by US regulators last year — forcing it to refund most (but not all) of the money it had booked for the failed TON platform — so speculation over how Telegram will monetize its platform goes on.

In recent weeks Durov has responded to this chatter via his public Telegram channel to confirm he’s considering introducing ads for “large one-to-many channels” — but pledging he won’t do so in chats.

He has also rejected the notion of using user data to target ads — a move that would undermine the loud privacy promises Telegram repeatedly makes to users to put clear blue water between its platform and the (Facebook-owned) data-mining competition.

“Users will be able to opt out of ads, but I do think that privacy-conscious ads are a good way for channel owners to monetize their efforts — as an alternative to donations or subscriptions, which we are also working to offer them,” Durov wrote last month.

Telegram’s usage has, meanwhile, continued to swell this year — boosted by users switching from Facebook-owned WhatsApp over privacy concerns. So there’s limited room for copycat monetization, unless Durov is willing to trash his personal ‘pro-privacy, pro-user’ brand. To say that’s highly unlikely is an understatement.

Nonetheless, he has further limited his options by rejecting a series of investment offers in recent months.

A report in Russian press earlier this year said he’d rejected an investment offer for a 5%-10% stake in the company that had valued it at $30BN. We’ve also been told he rejected a higher offer that had valued Telegram at $35BN — and another of $4BN at a $40BN pre-money valuation.

“Durov is afraid of investors of any kind,” one source told us on why he refused to give up any equity.

Debt financing seems to be Telegram’s preferred route at this stage. Back in January The Information reported that it was discussing raising up to $1BN in debt financing from with banks and investors — which would convert to shares in an eventual public offering.

That debt route — via pre-IPO convertible bonds — is now taking shape with today’s investment news out of Abu Dhabi. Although $150M is a lot less than the rumoured $1BN so this may be just an initial tranche. (And may in fact be needed to pay back TON investors’ whose refunds are falling due.)

But with a couple of debt backers sticking their necks out to take a punt on Durov’s anti-establishment alternative — and on the chance of an Telegram IPO by 2026 — the company is in a better position to get buy in from other debt funders, including in the region as it deepens its geographical commitment to the Middle East.

One key attraction for Telegram backers is likely to be its agile product dev. There Durov has repeatedly shown he can deliver — growing usage of his platform with the help of a steady pipeline of user-focused features.

Efforts on the product side at this stage look geared towards pivoting into a Patreon-style platform for content creators to build communities of followers willing to pay for their content (which would thereby enable Telegram to monetize by taking a cut as commission).

“Our end goal is to establish a new class of content creators — one that is financially sustainable and free to choose the strategy that is best for their subscribers,” wrote Durov last month. “Traditional social networks have exploited users and publishers for far too long with excessive data collection and manipulative algorithms. It’s time to change this.”

Just over a month later his channel lit up again with more product news — this time capitalizing on the buzz around social audio with the announcement of the launch of a Clubhouse-clone on Telegram channels dubbed “voice chats 2.0”.

He also announced feature that lets admins of channels and public groups host voice chats for millions of live listeners — taking the cap off the earlier feature. “No matter how popular your talk gets, new people will be able to tune in. It’s like public radio reinvented fo the 21st century,” Telegram’s blog post enthused.

Durov had more developments to tease: One-to-many video broadcasts that will see the platform let users host their own ‘TV stations’ which he said will be coming this “spring”. So Telegram continues to evolve as the social app landscape shifts.

Commenting on the debt financing in a statement, James Munce, CFO and COO of Abu Dhabi Catalyst Partners (ADCP), lauded Telegram’s management team’s “unshakeable dedication to building a platform centred around privacy and user experience”.

“We believe this creates a strong value proposition and will be a focal point for social media platforms and a new era of messaging,” he added.


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Following backlash, WhatsApp to roll out in-app banner to better explain its privacy update

By Sarah Perez

Last month, Facebook-owned WhatsApp announced it would delay enforcement of its new privacy terms, following a backlash from confused users which later led to a legal challenge in India and various regulatory investigations. WhatsApp users had misinterpreted the privacy updates as an indication that the app would begin sharing more data — including their private messages — with Facebook. Today, the company is sharing the next steps it’s taking to try to rectify the issue and clarify that’s not the case.

The mishandling of the privacy update on WhatsApp’s part led to widespread confusion and misinformation. In reality, WhatsApp had been sharing some information about its users with Facebook since 2016, following its acquisition by Facebook.

But the backlash is a solid indication of much user trust Facebook has since squandered. People immediately suspected the worst, and millions fled to alternative messaging apps, like Signal and Telegram, as a result.

Following the outcry, WhatsApp attempted to explain that the privacy update was actually focused on optional business features on the app, which allow business to see the content of messages between it and the end user, and give the businesses permission to use that information for its own marketing purposes, including advertising on Facebook. WhatsApp also said it labels conversations with businesses that are using hosting services from Facebook to manage their chats with customers, so users were aware.

Image Credits: WhatsApp

In the weeks since the debacle, WhatsApp says it spent time gathering user feedback and listening to concerns from people in various countries. The company found that users wanted assurance that WhatsApp was not reading their private messages or listening to their conversations, and that their communications were end-to-end encrypted. Users also said they wanted to know that WhatsApp wasn’t keeping logs of who they were messaging or sharing contact lists with Facebook.

These latter concerns seem valid, given that Facebook recently made its messaging systems across Facebook, Messenger and Instagram interoperable. One has to wonder when similar integrations will make their way to WhatsApp.

Today, WhatsApp says it will roll out new communications to users about the privacy update, which follows the Status update it offered back in January aimed at clarifying points of confusion. (See below).

Image Credits: WhatsApp

In a few weeks, WhatsApp will begin to roll out a small, in-app banner that will ask users to re-review the privacy policies — a change the company said users have shown to prefer over the pop-up, full-screen alert it displayed before.

When users click on “to review,” they’ll be shown a deeper summary of the changes, including added details about how WhatsApp works with Facebook. The changes stress that WhatsApp’s update don’t impact the privacy of users’ conversations, and reiterate the information about the optional business features.

Eventually, WhatsApp will begin to remind users to review and accept its updates to keep using WhatsApp. According to its prior announcement, it won’t be enforcing the new policy until May 15.

Image Credits: WhatsApp

Users will still need to be aware that their communications with businesses are not as secure as their private messages. This impacts a growing number of WhatsApp users, 175 million of which now communicate with businesses on the app, WhatsApp said in October.

In today’s blog post about the changes, WhatsApp also took a big swipe at rival messaging apps that used the confusion over the privacy update to draw in WhatsApp’s fleeing users by touting their own app’s privacy.

“We’ve seen some of our competitors try to get away with claiming they can’t see people’s messages – if an app doesn’t offer end-to-end encryption by default that means they can read your messages,” WhatsApp’s blog post read.

This seems to be a comment directed specifically towards Telegram, which often touts its “heavily encrypted” messaging app as more private alternative. But Telegram doesn’t offer end-to-end encryption by default, as apps like WhatsApp and Signal do. It uses “transport layer” encryption that protects the connection from the user to the server, a Wired article citing cybersecurity professionals explained in January. When users want an end-to-end encrypted experience for their one-on-one chats, they can enable the “secret chats” feature instead. (And this feature isn’t even available for group chats.)

In addition, WhatsApp fought back against the characterization that it’s somehow less safe because it has some limited data on users.

“Other apps say they’re better because they know even less information than WhatsApp. We believe people are looking for apps to be both reliable and safe, even if that requires WhatsApp having some limited data,” the post read. “We strive to be thoughtful on the decisions we make and we’ll continue to develop new ways of meeting these responsibilities with less information, not more,” it noted.

India asks WhatsApp to withdraw new privacy policy over ‘grave concerns’

By Manish Singh

India has asked WhatsApp to withdraw the planned change to its privacy policy, posing a new headache to Facebook-owned service that identifies the South Asian nation as its biggest market by users.

In an email to WhatsApp head Will Cathcart, the nation’s IT ministry said the upcoming update to the app’s data-sharing policy has raised “grave concerns regarding the implications for the choice and autonomy of Indian citizens… Therefore, you are called upon to withdraw the proposed changes.”

The ministry is additionally seeking clarification from WhatsApp on its data-sharing agreement with Facebook and other commercial firms and has asked why users in the EU are exempt from the new privacy policy but their counterpoint in India have no choice but to comply.

“Such a differential treatment is prejudicial to the interests of Indian users and is viewed with serious concern by the government,” the ministry wrote in the email, a copy of which was obtained by TechCrunch. “The government of India owes a sovereign responsibility to its citizens to ensure that their interests are not compromised and therefore it calls upon WhatsApp to respond to concerns raised in this letter.”

Through an in-app alert earlier this month, WhatsApp had asked users to agree to new terms of conditions that grants the app the consent to share with Facebook some personal data about them, such as their phone number and location. Users were initially provided until February 8 to comply with the new policy if they wished to continue using the service.

“This ‘all-or-nothing’ approach takes away any meaningful choice from Indian users. This approach leverages the social significance of WhatsApp to force users into a bargain, which may infringe on their interests in relation to informational privacy and information security,” the ministry said in the email.

The notification from WhatsApp prompted a lot of confusion — and in some cases, anger and frustration — among its users, many of which have explored alternative messaging apps such as Telegram and Signal in recent weeks.

An advertisement from WhatsApp is seen in a newspaper at a stall in New Delhi on January 13, 2021. (Photo by Sajjad HUSSAIN / AFP) (Photo by SAJJAD HUSSAIN/AFP via Getty Images)WhatsApp, which Facebook bought for $19 billion in 2014, has been sharing some limited information about its users with the social giant since 2016 — and for a period allowed users to opt-out of this. Responding to the backlash last week, the Facebook-owned app, which serves more than 2 billion users worldwide, said it was deferring the enforcement of the planned policy to May 15.

WhatsApp also ran front-page ads on several newspapers in India, where it has amassed over 450 million users, last week to explain the changes and debunk some rumors.

New Delhi also shared disappointment with the timing of this update, which to be fair WhatsApp unveiled last year. The ministry said that it was reviewing the Personal Data Protection Bill, a monumental privacy bill that is meant to oversee how data of users are shared with the world.

“Since the Parliament is seized of the issue, making such a momentous change for Indian users at this time puts the cart before the horse. Since the Personal Data Protection Bill strongly follows the principle of ‘purpose limitation,’ these changes may lead to significant implementational challenges for WhatsApp should the Bill become an Act,” the letter said.

On Tuesday, India’s IT and Law Minister Ravi Shankar Prasad also offered a loud advice to Facebook. “Be it WhatsApp, be it Facebook, be it any digital platform. You are free to do business in India but do it in a manner without impinging upon the rights of Indians who operate there.”

➡ Be it WhatsApp, Facebook or any other digital platform they are free to do business in India but it should be done in a manner without impinging upon the rights of Indians who operate it. The sanctity of personal communications needs to be maintained: @rsprasad at #15IDS pic.twitter.com/p33qynU6Ur

— RSPrasad Office (@OfficeOfRSP) January 19, 2021

Tencent-backed Hike, once India’s answer to WhatsApp, has given up on messaging

By Manish Singh

India’s answer to WhatsApp has completely moved on from messaging.

Hike Messenger, backed by Tencent, Tiger Global and SoftBank and valued at $1.4 billion in 2016, earlier this month announced that it was shutting down Sticker Chat, its messaging app.

The startup, founded by Kavin Bharti Mittal, this month pivoted to two virtual social apps called Vibe and Rush, said Mittal, who is the son of telecom giant Airtel’s chairman Sunil Bharti Mittal.

In a series of tweets earlier this month, Kavin said that India will never have a homegrown messenger that makes inroads in the world’s second largest market unless it chooses to ban Western companies from operating in the nation. “Global network effects are too strong,” he said. WhatsApp has amassed over 450 million users in India, its biggest market by users.

Mittal described opportunities in building virtual worlds as a “much better approach for today’s world that is unconstrained by cheap, fast data and powerful smartphones.”

In recent years, Hike made bets on stickers and emojis to cater to the younger population in India. In a meeting with TechCrunch in late 2019, Mittal said that the startup was overwhelmed with the engagement stickers on its platform and was working to automate development of personalized stickers.

In a different meeting last year, Mittal showcased emojis that replicated human expressions and a virtual hangout place called HikeLand. Vibe is the rebranded version of HikeLand and the emojis Hike developed will continue to be available to users on both the newer apps, Mittal said earlier this month.

Hike, which has raised more than $260 million to date, had enough runway last year, Mittal said, who hinted that the startup may raise more capital a year later.

Hike also attempted to build its own operating system through acquisition of a startup called Creo. In 2018, Hike launched Total OS that aimed to cater to users with low-cost Android smartphones and slow internet data.

The startup later shut down the project. Mittal told TechCrunch that the arrival of Reliance Jio, which prompted Airtel and Vodafone to lower mobile data tariff on their networks, solved the data issues in the country and Total OS was no longer needed in the market.

Signal and Telegram are also growing in China — for now

By Rita Liao

As fears over WhatsApp’s privacy policies send millions of users in the West to Signal and Telegram, the two encrypted apps are also seeing a slight user uptick in China, where WeChat has long dominated and the government has a tight grip on online communication.

Following WhatsApp’s pop-up notification reminding users that it shares their data with its parent Facebook, people began fleeing to alternate encrypted platforms. Telegram added 25 million just between January 10-13, the company said on its official Telegram channel, while Signal surged to the top of the App Store and Google Play Store in dozens of countries, TechCrunch learned earlier.

The migration was accelerated when, on January 7, Elon Musk urged his 40 million Twitter followers to install Signal in a tweet that likely stoked more interest in the end-to-end encryption messenger.

The growth of Telegram and Signal in China isn’t nearly as remarkable as their soaring popularity in regions where WhatsApp has been the mainstream chat app, but the uplift is a reminder that WeChat alternatives still exist in China in various capacities.

Signal amassed 9,000 new downloads from the China App Store between January 8 and 12, up 500% from the period between January 3 and 7, according to data from research firm Sensor Tower. Telegram added 17,000 downloads during January 8-12, up 6% from the January 3-7 duration. WhatsApp’s growth stalled, recording 10,000 downloads in both periods.

Sensor Tower estimates that Telegram has seen about 2.7 million total installs on China’s App Store, compared to 458,000 downloads from Signal and 9.5 million times from WhatsApp.

The fact that Telegram, Signal and WhatsApp are accessible in China might come as a surprise to some people. But China’s censorship decisions can be arbitrary and inconsistent. As censorship monitoring site Apple Censorship shows, all major Western messengers are still available on the China App Store.

The situation for Android is trickier. Google services are largely blocked in China and Android users revert to Android app stores operated by local companies like Tencent and Baidu. Neither Telegram nor Signal is available on these third-party Android stores, but users with a tool that can bypass China’s Great Firewall, such as a virtual private network (VPN), can access Google Play and install the encrypted messengers.

The next challenge is actually using these apps. The major chat apps all get slightly different treatment from Beijing’s censorship apparatus. Some, like Signal, work perfectly without the need for a VPN. The catch is to sign up for Signal, a user must activate their account with a phone number, and Chinese phone numbers are tied to people’s real identities. Users have reported that WhatsApp occasionally works in China without a VPN, though it loads very slowly. And Facebook doesn’t work at all without a VPN.

“Some websites and apps can remain untouched until they reach a certain threshold of users at which point the authorities will try to block or disrupt the website or app,” said Charlie Smith, the pseudonymous head of Great Fire, an organization monitoring the Chinese internet that also runs Apple Censorship.

“Perhaps before this mass migration from WhatsApp, Signal did not have that many users in China. That might have changed over the last week in which case the authorities could be pondering restrictions for Signal,” Smith added.

To legally operate in China, companies must store their data within China and submit information to the authorities for security spot-checks, according to a cybersecurity law enacted in 2017. Apple, for instance, partners with a local cloud provider to store the data of its Chinese users.

The requirement raises questions about the type of interaction that Signal, Telegram and other foreign apps have with the Chinese authorities. Signal said it never turned over data to the Hong Kong police and had no data to turn over when concerns grew over Beijing’s heightened controls over the former British colony.

The biggest challenges for apps like Signal in China, according to Smith, will come from Apple, which is constantly under fire by investors and activists for submitting to the Chinese authorities.

In recent years, the American giant has stepped up app crackdown in China, zeroing in on services that grant Chinese users access to unfiltered information, such as VPN providers, RSS feed readers and podcast apps. Apple has also purged tens of thousands of unlicensed games in recent quarters after a years-long delay.

“Apple has a history of preemptively censoring apps that they believe the authorities would want censored,” Smith observed. “If Apple decides to remove Signal in China, either on its own initiative or in direct response to a request from the authorities, then Apple customers in China will be left with no secure messaging options.”

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