Under an onslaught of cheap wireless internet devices from Reliance Jio, Indian brands such as iBall, Intex and Micromax have virtually exited the data dongle market, while the once dominant Huawei has been reduced to a 7% share, according to CMR.
For the whole of 2017, all the top five models of datacards belonged to Jiofi family brought out by Reliance Retail.
For the year, Jiofi increased its market share to 85% from 38% in 2016, while Huawei fell to just 7% from 25% and ZTE fell to 4% from 13%.
“Data card shipments from other vendors, including iBall, Intex, and Micromax registered continuous decline. As a result, they gradually moved out of market by the end of CY2017,” CMR said.
Reliance Retail’s JioFi devices, which are bundled with 4G connections from Reliance Jio, are available at various price points from Rs 999 to Rs 1,999, while competing 4G Wifi devices from independent device makers costs at least Rs 2,600.
On a positive note, the huge influx of JioFi devices have increased the sales of datacards to 2.5 times what it was in the previous year. 99% of the datacards sold in 2017 came with 4G LTE.
Besides Jio, other operators like Bharti Airtel and Idea Cellular also offer Mifi devices, though the market share of these devices are still in the low single digits.
“On the back of its continuous launch of affordable internet plans along with its MiFi devices at exceptionally competitive prices, Jio grew aggressively during the festive season in the second half of 2017,” said Shipra Sinha, Lead Analyst for CyberMedia Research.
Bundling of free services, usually equivalent to the price of the device, has helped Reliance Retail corner a lion’s share of the datacard market over the last one year.
In many areas, especially in smaller towns, Mifi devices are fast emerging as the primary and most affordable source of broadband connectivity, along with mobile phones. In such areas, wired broadband services are prohibitively costly.
Thanks to built-in battery, these devices are also resistant to powercuts, a persistent problem in rural areas.
“The rising acceptance of Mi-Fi’s, primarily driven by Reliance Retail in Tier II and Tier III cities will make way for this device category to continue to expand to major parts of India,” added Sinha. “January-March 2018 is expected to witness good sales with the introduction of new Reliance Retail’s JioFi models accompanied by its cost-effective internet plans.”
The increasing popularity of wireless internet devices have also taken a toll on the router market. Routers are largely used by subscribers of wired internet services.
“Home Router market witnessed downfall post launch of JioFi devices,” the analyst said. “Capitalizing on the limited coverage of WiFi routers and their continuous requirement of power, MiFi devices with their inbuilt battery alongwith portability feature captured the space.”
While bundling has helped Jio corner the datacard market, the company has had far less success with its LYF smartphone venture.
After making an initial splash, LYF currently has a negligible share of India’s smartphone market, dominated by Chinese players like Xiaomi, Lenovo and BBK Electronics.
However, recent market numbers indicate that the company is on track to finding substantial success in India’s featurephone market, setting alarm bells ringing for rivals like Bharti Airtel and Idea Cellular.
According to market data for January, the company is estimated to have shipped 9-10 million Jiophones during the month, making it the biggest mobile phone brand in India for the period by far.
If it continues to repeat the January performance in subsequent months, it would go on to dominate India’s featurephone market just like it dominates the country’s datacard market at present.
This would be bad news not only for companies like Lava and itel, but also for companies like Bharti Airtel, Idea Cellular and Vodafone, as the Jiophone works only on Jio’s network.