Reliance Jio corners 91% of data card market; could hit BSNL broadband

The shipments data cards or dongles in India jumped 15% in Apr-June period compared to the previous three months, thanks to aggressive sales of Reliance Jio Mifi devices.

The Ambani company had a 91% share of the dongle market in the country during the period, said CyberMedia Research. The company has been offering value back offers, under which it gives free data worth the price of the dongle to anyone who purchases the device.

Among Reliance Jio offered MiFi devices, M2S continued to be country’s fastest selling model, JMR1140 stood second while JioFi ranked third.

Huawei, which used to dominate the market, has seen its share fall to just 3%.

Also not surprising, 4G dongles accounted for close to 100% of the total shipments, up from 99% in the preceding three months. Moreover, only 3% of the devices came with no battery inside.

Compared to the same three months of 2016, the total data card shipments were up seven times at 4 million, while they were up 16% compared to the preceding three months of January-March.

Launch of consecutive free data services followed by availability of Mi-Fi- data cards at different prices along with aided the consistent growth of Reliance Jio with 91% during the same time period, CMR said.

Among non-Jio players, Alcatel witnessed the fastest growth by 522% in 2Q CY2017, whereas ZTE and D-Link shipments registered decline of 21% in case of former and 82% in case of latter respectively.

Mi-Fi’s primarily driven by Jio are gaining acceptance in Tier II and Tier III cities and towns that could result in erosion of potential broadband base for operators like BSNL, the agency warned.

“In such towns and cities, users benchmark broadband speed and quality with that of BSNL fixed line broadband, which in majority of the circles for popular plans is 2 MBPS for residential users,” it said.

Mi-Fi could also slow the pace of 3G to 4G Smartphone replacement as the market looks for replacement opportunity in smaller towns and cities, it added.

“RJio’s MiFi devices (JioFi) also impact home router market. Our initial statistics from the channels suggest a decline of 60%-70% sales in major cities. Now it has started affecting the SOHO / SMB router market in other cities and towns as well. To counter competition is attempting to level the equation by offering matching plans, etc. However, I expect Mi-Fi’s to continue cannabalising the entry level router market for few more quarters from now,” said Narinder Kumar, Analyst, Industry Intelligence Practice, CMR.

Data card with data rate of 150 Mbps accounted for 97% of the total market of overall shipments in 2Q CY2017. Around 92% of Data Cards were on Qualcomm Chipsets during the period.

Mi-Fi is going to play a pivotal role in the Digitalisation of the country, the research agency said.

The key advantage of MiFi is that they are uniquely suited to the Indian market, which is dominated by mobile devices that depend on Wifi, instead of laptops and desktops.

“As internet penetrated deep in to the towns and villages of the country, Mi-Fi devices are likely to have a critical role to play as it supports multiple connections giving the WiFi enabled fixed broadband experience to the users, does not require changing of the existing handsets and is also affordable from both initial investment as well as the data plans.

“It would be worth to consider for other operators to expand their digital footprints within their serviced circles as they look for new users in the non-metro and Tier 1 cities,” it added..