No Strings Attached

In today’s world where business and pleasure go hand-in-hand, the
working force needs to be constantly accessible and have connectivity to the Internet.
People are increasingly finding it important to be mobile in the work they do as well as
have the option of working at their convenience. There was a time when work meant sitting
at a corner in office, completing your work and then going home. This scenario has seen a
sea change in recent times with the penetration of Internet into even remote areas of the
country and laptops becoming the next ‘in demand’ products.

This is where data cards come into the picture. For all those people who
have laptops and want access to the Internet while on the move, this is the solution.
These tiny cards that are approximately the size of credit cards, allow the user to
connect to the Internet wirelessly. Data cards also have additional benefits like
telephony, SMS facility and caller ID options. Users can make calls and also send SMSes,
using the card, from their laptop.

But while the offer might seem enticing, the fact remains that India is
still on the cusp of wide-spread laptop usage, hence not yet up to the mark in terms of
the adoption of data cards.

Potentials

One thing that can not be ignored though is that the prospects for this market are huge.
Airtel, which is one of the few companies that provides data cards in India, announced its
partnership with a Belgium-based wireless data card manufacture, Option, in mid 2005 to
launch Airtel-branded data cards called EDGE-BOOST. During that time, Jan Callewaert, CEO,
Option had commented that India being the fourth-largest economy and one of the fastest
growing markets, presented a good business opportunity that could not be overlooked.

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The market opportunity is to provide ‘Internet on the move’ for laptop users, and fixed Internet access for small towns where wireline broadband is not feasible " SP Shukla, President—Personal Business Reliance Communications

Another company providing data cards in India is Tata Teleservices. Tata
made its entry into the data card market with the launch of VData Cards in 2005. Speaking
about the potential in this market,Vinayak Deshpande, President- Enterprise and HMI
Business, Tata Teleservices said, "India has a huge untapped market in terms of
Internet connectivity. Currently, India is adding about 50-lakh Internet connections YoY,
a growth of over 30 percent per annum. Most Internet connectivity is through a wired
medium which acts as a barrier for seamless connectivity. Data cards have an edge over
other connectivity options in terms of enabling the user to be mobile and connect to the
Internet wirelessly, anywhere in India, at reasonably high speeds."

A pioneer in providing data cards in India is Reliance. It was the first
company to provide wireless data cards on its network as part of its R Connect Internet
services. Throwing light on the latent opportunity in the country, SP Shukla,
President-Personal Business, Reliance Communications said, "The market opportunity is
to provide ‘Internet on the move’ for laptop users, and fixed Internet access
for small towns or remote locations where wireline broadband is not feasible due to
infrastructure limitations or due to the few number of potential users."

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"Data cards are still priced very high as compared to other Internet connectivity media, a prime reason being the heavy government levies of about 22 percent" Vinayak Deshpande, President-Enterprise and HMI Business, Tata Teleservices

The creases

Yes, data cards do get us away from messy wires and most importantly, enhance the
productivity time of an individual, but this technology also comes with its set of
problems that have yet to be ironed out. One of the major issues with data cards is to do
with the speed levels they offer, which cannot compare to that one would otherwise get on
a broadband connection. Shukla shared that Reliance currently offers speeds up to 153kbps,
but typical speeds during peak hours/locations was at 20 to 40kbps. He pointed out that
while high-speed Internet connectivity is also desirable, users bought data cards mainly
for the convenience of anytime, anywhere access.

Seconding Shukla’s point about the speed of data cards, Deshpande
added, "Theoretically speaking, our data cards are capable of delivering speeds as
high as 153.6kbps. However, this speed depends on several factors such as network
congestion, bandwidth etc. It can be safely assumed that customers can download/upload
data at rates of over 40kbps easily." With EV-DO (evolution-data optimized)
technology, which is an ‘always on’ personal broadband wireless service that
operates on the CDMA signal, the speed of data cards is set to see a transformation.

So on one hand while we are coping with slow Internet connectivity through
our data cards, we also have the issue of price on the other hand. Given that the price of
data cards has seen a tremendous drop since the time they were launched in India, they are
still considered on the steep side for the average Indian. But data card manufactures
attribute this fault to the government and its taxes. "Data cards are still priced
very high as compared to other Internet connectivity media, a prime reason being the heavy
government levies of about 22 percent," stated Deshpande. If the custom duty on data
cards is reduced by the government, it would surely go a long way in helping to increase
Internet penetration in the country.

Despite its set of hurdles, vendors do agree that the future of data cards
market is bright. This is especially due to the fact that mobility and the demand for
laptops has grown by over 100 percent in the last year and is showing no signs of letting
up. According to Deshpande, the laptop market, which is inherently a segment for wireless
data cards, is growing at around 150 percent. "Taking into account the cross
compatibility of these devices with desktops as well, we easily expect the market to grow
over 150 percent in the coming year," he added. With so much potential, it’s a
wonder why there are just a handful of players in this segment. But there is no doubt that
there are players who are eying the market and just waiting for the right time to mark
their entry here.

Ruth Samson