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DATA CARD : Growth on the Cards

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VoicenData Bureau
New Update

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.

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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.

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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.

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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 £10 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.

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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.

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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.

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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.

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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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