Unlike the '70s and '80s when business-related travel was not seen much, the
'90s, particularly the dawn of the twenty-first century, has witnessed intensive
business travels, and this is gaining momentum with time. India too is on the
move and wants to stay connected anytime, anywhere-whether on a train or bus, in
a hotel or conference hall, within India or abroad. Meeting this need of
business travelers are data cards and USB modems that have become the preferred
solution, even before wireless mobile broadband is introduced in the country. At
present, there are 10 mn data cards, USB modems, and Internet-enabled mobile
phones in the Indian market.
According to the World Travel and Tourism Council, India has become one of
the fastest growing countries in terms of the number of travels made within the
country and between countries, by road and air. And here the communications
industry found a profitable business opportunity.
Driving Growth
Growing businesses in all segments, necessity to access emails and corporate
applications during urgent business trips and the urge for some entertainment
while on the move are some drivers increasing the demand for data card usage.
Apart from these factors, as the name of Tata Indicom's data card, 'Plug 2
Surf', suggests, ease of use with plug and play factor is also a driver for
growth. SP Shukla, president, Personal Business, Reliance Communications, says
that faster surfing and higher download speeds, convenience of surfing the
Internet while on the move, simple to use, and affordable tariffs are among the
key reasons for the data card growth, in both the laptop and desktop segments.
Wireline broadband connections are yet to penetrate the vast semi-urban and
rural parts of the country where entrepreneurs, officials, students, etc have
the need to surf the Internet for various purposes. Though the laptop
penetration in these areas has not made a significant mark, desktop penetration
is comparatively more.
With data cards offering convenient access to the Internet, a number of
companies have started to tie up with service providers to avail bulk network
connections for their employees on the go and allow them to utilize their time
during business travels. Since data cards can be used with desktop also, it cuts
down the office infrastructure costs as well. With the data card segment
witnessing steady growth, affordability will go up, which, in turn, will drive
growth. “As the data card growth increases, speed evolves and prices come down,
affordability will go up and more users can begin to think of data card as an
affordable solution,” says an Airtel spokesperson. And growth of mobile
telephony in India has created users with specific needs like m-commerce that
require wireless Internet, driving the wireless data card growth. Once the
concept of mobile wallet and its applications hit the market in India in the
near future, the wireless data card segment is also expected to witness an
exponential growth.
Apart from this, Internet charges in costly hotels are very high. With the
availability of data cards and USB modems, frequent business travelers who stay
in costly star hotels can access the Internet and corporate applications on
their laptops and avoid using the Internet facility at hotels, saving on high
Internet charges.
The Deterrents
All players are competing with each other to give affordable tariff rates
for their data cards. But still the rates are very high when compared to
countries like the UK. In the UK, wireless broadband connection through 3G
technology costs about Ł10 per month and that too with a data download speed
faster than 256 Kbps. International travelers who have used data cards with
faster speed are not satisfied with data cards and USB modems services offered
in India. So, in India, data cards mean accessing a bare minimum net
connectivity only for a sizable population. That is why it is said that data
cards have not exactly taken off in India.
Customers often feel that service providers do not deliver what they promise.
They feel players should present the terms and conditions and tariff
plans/schemes in clear terms. Mentioning every small detail regarding the tariff
plans must be included in the bill. For example, if a company intends to collect
an advanced monthly rental from customers, then it has to mention that in its
tariff plan, so that customers are not shocked when they see a bill that
includes monthly advance rentals as well. This kind of practice might keep
customers away from going for a particular brand.
Players in the Fray
All major service providers, including Reliance Communications, Bharti
Airtel, Tata Indicom, BSNL, and Vodafone, have launched data cards to tap the
vast opportunity lying ahead. The players are offering data cards and USB modems
at competing prices and different tariff plans to woo customers.
Reliance: Reliance Communications introduced its data card as part of its R
Connect Internet Service in Delhi, Mumbai, Chennai, Hyderabad, and Bangalore.
Its data cards work on the CDMA technology with its pan-India CDMA2000 1x
network. Reliance Netconnect, with a speed upto 144 Kbps, has presence in over
15,000 towns and 4 lakh villages. Reliance Netconnect products include data
cards that can be used in the PCMCIA slot and USB modems for laptops and
desktops, and data cables for mobile phones and fixed wireless phones. Its data
cards and USB modems support SMSes and voice calls.
According to SP Shukla, president, Personal Business, Reliance
Communications, the company's subscriber base and usage have been experiencing a
steady and robust growth over the last two years. He says, “Faster surfing and
higher download speeds, and affordable tariffs are among the key reasons for
laptop and desktop users preferring Reliance Netconnect over competing offerings
including conventional dial-up Internet connections.” Reliance Communications
claims that its leadership position in the data card market is showing a steady
increase quarter after quarter. The company also expects the huge growth trend
to continue in the coming quarters as well. RCom has set a high target of
penetrating 30% of the laptop market and 10% of the 25 mn plus desktop market in
India. Recently, the telco has slashed the data card price by 13%. PCMCIA Data
Card came down to Rs 2,590 from Rs 2,990, and USB modem to Rs 2,490 from Rs
2,850. This move will help push its target aggressively in the market.
The company in its latest move has tied up with laptop manufacturers HP,
Lenovo and HCL to bundle its data card. The company has sold 12,000-14,000 units
a month over the last four months.
Bharti Airtel: Bharti Airtel data cards and USB modems, with their GPRS and
EDGE technology, works on the Airtel network within the country and on GSM
networks globally. Its quad-band radio card is suitable for use on EGRPS/GPRS/GSM
networks worldwide. While EGRPS Internet speed is 100 Kbps, GPRS/GSM data
performance speed is 40 Kbps depending on the network. Products are compatible
with most notebooks and PDAs that provide a type-II PC-card slot. Airtel data
cards allow customers to send and receive SMSes, and it is compatible with
Windows 2000/XP/XP Tablet/XP Pro and Mac operating systems, enabling customers
to stay in touch with their business partners and clients.
Apart form supporting IP Sec client software for secure VPN, its USB modem
supports an account management and technical call center, and service level
agreements.
The Bharti Airtel spokesperson says, “Growing disposable incomes and
recognition of the multifarious benefits of the Internet are driving the
adoption of data access options like data cards.” Like Reliance Communication,
this player also has the intention to pass on benefits of any duty cuts to the
user. The spokesperson says, “As an industry leader, Airtel has always believed
in passing on benefits of any duty cuts to the end customer. We believe that
bringing down the cost of wireless data access like hi-speed Internet access
through data cards will fuel growth in a category that is seeing rapid adoption
rates among the growing mobile population in India.”
Tata Indicom: Its USB modem and wireless data cards offer net services to
surf the Internet, Intranet, and extranet with speeds up to 153.6 Kbps. But the
speed is inconstant and depends on the time, number of simultaneous users, Web
page accessed, etc. Though it claims to be providing 153.6 Kbps, its average
speed, according to the user, is 63 Kbps, touching 115 Kbps sometime.
Tata Indicom's wireless network solutions, 'Plug 2 Surf' (USB modem) and
VData Card (Wireless data cards) serve as a wireless network connection, a
mobile phone, and a modem. Tata Indicom' VData Card, which works on the CDMA
technology, can be inserted into the standard type-II PCMCIA card slot of
laptops. These two mobile solutions have features including group SMSes and
Sales Force Automation integrated its services.
Vodafone: This player launched Mobile Connect EDGE Data Card, which is
currently priced at Rs 4,999. Comparatively, its data card price is costlier
than data cards of other players. It has only two monthly rental plans priced at
Rs 499 and Rs 699. It can work with customers' preferred VPN software to give
access to company server and Intranet. Vodafone's Mobile Connect EDGE Data Card
supports SMS facilities, but not voice calls unlike data cards of Reliance
Communication and Tata Indicom.
BSNL: It is the only brand that offers data card on a monthly rent basis, for
Rs 150. Since BSNL has the early mover advantage in the telecom arena, its
infrastructure is also very strong giving customers good speed and coverage. If
customers have WLL or FWT coverage in their area, the data card will work. Its
data card is Huawei-EC 321 and is compatible with IS-95 A/B. BSNL data card also
supports SMSes and voice calls. Despite all the features it offers, BSNL will
take a while to catch up with private players in terms of business performance
in the data card market.
Is 3G a Deterrent?
There is a perception that when mobile broadband is introduced, data cards
will take a beating. However, data card players have a different take on this
issue. They believe that 3G's arrival will, in fact, be an opportunity for more
growth in this segment. Shukla of Reliance Communications says, “the launch of
mobile broadband will give a major boost to data cards, as we will launch
broadband data cards and give much higher speeds to our customers.” He adds:
“While mobile broadband services would offer significant advantages to certain
customer segments, we believe that the huge potential and latent demand for data
cards would maintain the steady and robust growth of this service category, as
experienced in the recent quarters.” The Bharti Airtel spokesperson also echoes
the same. He says, “When 3G will arrive in India, data cards too will migrate to
this higher platform, offering speeds that would compete or match a broadband
Internet experience.”
Future Growth
In this year's budget, union finance minister P Chidambaram has reduced the
excise duty on wireless data modem cards by 16%. It is a significant move as far
as the data card players are concerned, as it will encourage service providers
to slash prices of their wireless data cards drastically. Greater affordability
is a major driving factor for the growth of the data card, catering to the needs
of a wider market. Shukla of Reliance Communication says, “The custom duty
reduction in wireless data modem cards is a welcome move, as it would make the
entry costs of these superior Internet connectivity solutions even more
affordable.”
Airtel has a similar belief. The Airtel spokesperson says, “We believe that
bringing down the cost of wireless data access like high-speed Internet access
through data cards will fuel growth in a category that is seeing rapid adoption
rates among the growing mobile population in India.”
The industry is of the firm belief that factors like affordable tariff plans
and affordable prices of data cards, the convenience data cards offer in
accessing the Internet, and the growing needs to use data cards by business and
personal travelers, among other things, will drive the future growth of the data
card segment in India. The government has targeted to achieve a data card
subscriber base of 40 mn by 2010 from the current 10 mn subscribers. The launch
of mobile broadband will play a vital role in deeply penetrating the broadband
Internet market in India.
It was also announced in the 2008-09 budget that one lakh broadband-enabled
common service centers in villages will be established at a cost of Rs 5,400
crore. But since data card players have the first mover advantage, in rural and
semi urban areas, data cards might become synonymous to broadband connections
unlike in cities where wireline broadband rules the roost.
Kannan K
kannan@cybermedia.co.in
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