Data Card: Long Live the Card!

The data card business is growing in a big way in India and is showing impressive growth y-o-y. With increasing digitized lifestyles, the need for wireless broadband is growing rapidly which has led to an upsurge in the usage of data cards. The data card market has emerged as one of the fastest growing sectors in the last fiscal and all the vendors in this segment have shown good revenue growth.

The numbers for this sector speak for itself. The data card industry grew by 17% in FY12. Data Card Industry showed tremendous growth from FY11 with many new players entered the arena and clocked the revenue to `1,260 Cr for FY12

With the increase of broadband usage and the launch of 4G data card segment is likely to boost further growth in the Indian market.

Leading the wagon and sitting on the largest chunk of the market share is Huawei, with impressive market share of 55% in FY12 showing 10% increase from FY11. Huawei plans to work closely with operators to offer reversed bundled data plans in the open market helping operators expand their data business.

Huawei is followed by ZTE which has shown tremendous improvement in its market share. The company clocked its revenue close to `449Cr in FY12 from `374 Cr in FY11 showing a growth of 20 percent. ZTE is supplying data cards to almost all the major operators like BSNL, airtel, MTS, Reliance, Aircel, etc.

Third in the league is Micromax, showing consistent performance. Micromax gained 7% of the market share and showed 37% growth this fiscal. Micromax has been a regular supplier to Aircel, Tata Docomo, Reliance, MTNL, BSNL, and airtel. Olive showed close to 10 percent growth in the data card industry and is slowly and gradually firming its position in the industry. Companies like Intex (launched its Data Card in November last year), Salora, iBall, Frontech have also joined the league and already boosted the growth.

Teracom has also made significant inroads in the data card industry with 3G and WiMax dongles in their portfolio. The company launched its data cards in 2010 and tied up with BSNL for the same. In FY12, Teracom's revenues clocked close to `11 crore and is expected to give tough fight to top three.

Growth Dossier

Data card industry is fueling growth of mobile broadband technologies in India. They are not only providing high speed but also better coverage. With 3G, this has further enhanced the speed. With mobility and evolution of smart devices, not only in India but also around the globe, the need and demand of being connected anywhere and anytime has further escalated the demand of data cards.

Today, the players in this segment are in tough competition with each other to offer best surfing speed at cheaper tariffs. Now, when fourth-generation technology is also coming into the picture, the industry is poised for further competition.

Players who have already launched 4G data cards in the market, will benefit from the first mover advantage provided the experience and speed promised is fulfilled. Huawei and ZTE have launched 4G data cards in Bengaluru and Kolkota.

For a seamless service experience, service providers have to meet the increasing demand for bandwidth, devices should be capable of using high-end services such as data download, accessing internet, etc.

The fight today is not only about the speed and connectivity, but other additional advantages that a vendor today is offering to its customers in data card industry. Players are leaving no stone unturned in offering best to its users with respect to services and experience.

Players are coming out with embedded cloud services into data cards and smartphones.

Huawei has cloud services in data cards (cloud plus) which is offering 16 GB space to users and comes free of cost loaded with remote features.

For One and All

Data cards are not only addressing the enterprise and business segments, but also varied segments like students, self-employed entrepreneurs, households, business verticals, consumers in smaller towns, etc.

Prepaid users on the other hand are contributing in a huge way to the adoption of data cards. As convenience and consumption become the key factors, there is an uphill climb in the number of subscribers opting for data cards. Affordability is also a major push factor as the prices have gone down heavily, which has led to an uptake even by mid-level consumers.

The growth has been such that the fixed broadband is also facing tough competition from the mobile broadband.

What's Next

Leaving behind the connectivity factor, the industry will keep growing as demand for additional functionalities like integrated music player, display, etc, will grow.

The Indian rural market is one of the key segments where the internet penetration hasn't increased as compared to the mobile reach. The rural sector holds a largely untapped potential for the data card players to grow the market to the next level. The trend to subscribe for fastest and instant wireless internet services has changed the entire ecosystem.

In the Indian telecommunications market, which is highly competitive, locking yourself to one operator's network is not a wise decision. But unfortunately, the 3G data card segment in India is dominated by SIM locked devices. Thus, having an open network data card has a lot of advantage over locked SIM dongles which will be an upcoming trend in the market.