India’s routers market has become another casualty of Reliance Jio’s aggressive expansion with many preferring to opt for the new entrant’s free data, using their mobile devices as hotspots or the new entrant’s portable WiFi devices for wireless internet.
According to International Data Corporation (IDC) data, there was a 19% sequential fall in router unit shipments resulting in a 22% fall in vendor revenue in the fourth quarter of 2016. The decline was attributed to Jio’s foray and demonetisation of high-value currency notes.
Players such as Netgear, Digisol and TP Link have faced a sharp slowdown in demand from mainly home or home-office users, typically using entry level routers priced under Rs 5,000 in the wake of Jio’s free data service. The Mukesh Ambani-owned company had offered all services for free till March 31 under two promotional offers, and continues to offer data at sharply discounted rates.
“The low-end router market is severely affected by free data (offered by Jio),” Netgear country manager for India & SAARC Marthesh Nagendra said, adding that consumers have postponed their router purchase for free data offered by Jio.
Nagendra said that between November 2016 and January-end 2017, the entry-level hotspot devices were “severely” stuck with the channel distributors, including online marketplaces such as Amazon and Flipkart, which were finding it difficult to sell the inventory.
Pavel Naiya, senior analyst, Devices and Analytics at Counterpoint Research, said Jio has sold around three million JioFi Hotspot devices between 2016-17 fiscal, with more than 50% of the sales in the last quarter alone.
“Reliance Jio had caused a bubble in the consumer segment which was due to free voice and data pricing,” IDC analyst Niharika Kumar told ET, adding that the slowdown would continue in the consumer router market at least in the coming quarter ending June.
Jio has already shipped in more than 30 lakh Mi-Fi devices so far, according to Counterpoint. The total imports of routers to India, according to industry estimates, is worth $300 million between April 2016 and December 2016.
Worryingly for the router makers, Jio is currently offering 100% cash back on Rs 1,999 worth JioFi 4G router with 10 free vouchers of 5GB each that can be used over a period of 10 months, after the ongoing Dhan Dhana Dhan offer. JioFi which is currently available under version 2 and 3, supports 8-10 devices.
San Jose-based Netgear that commands nearly 33% of the market share in India’s Rs 600 crore Wi-Fi router market said it saw a 5% quarterly growth, thanks to its presence in the mid- to high-end segment.
Mumbai-based Digisol believes that the consumer segment was swayed after the Jio’s ambitious launch.
“Jio had certainly impacted consumer broadband market for few months,” Digisol Systems chief operating officer Arati Naik said, adding that the bearing was not much as the company, being a manufacturer, was able to control output to match demand.
China-based TP-Link has also seen a brief slowdown for a period succeeding the second-half of 2016.
“There has been a brief hiatus in market where both Jio’s free service and demonetization played an equal role,” Lynn Wang, Managing Director, TP-Link India, said.
Wang, however, said that there is a big market in India which still remains untapped, giving opportunity to expand and grow in the coming years.
According to International Data Corporation (IDC) data, there was a 19% sequential fall in router unit shipments resulting in a 22% fall in vendor revenue in the fourth quarter of 2016. The decline was attributed to Jio’s foray and demonetisation of high-value currency notes.
Players such as Netgear, Digisol and TP Link have faced a sharp slowdown in demand from mainly home or home-office users, typically using entry level routers priced under Rs 5,000 in the wake of Jio’s free data service. The Mukesh Ambani-owned company had offered all services for free till March 31 under two promotional offers, and continues to offer data at sharply discounted rates.
“The low-end router market is severely affected by free data (offered by Jio),” Netgear country manager for India & SAARC Marthesh Nagendra said, adding that consumers have postponed their router purchase for free data offered by Jio.
Nagendra said that between November 2016 and January-end 2017, the entry-level hotspot devices were “severely” stuck with the channel distributors, including online marketplaces such as Amazon and Flipkart, which were finding it difficult to sell the inventory.
Pavel Naiya, senior analyst, Devices and Analytics at Counterpoint Research, said Jio has sold around three million JioFi Hotspot devices between 2016-17 fiscal, with more than 50% of the sales in the last quarter alone.
“Reliance Jio had caused a bubble in the consumer segment which was due to free voice and data pricing,” IDC analyst Niharika Kumar told ET, adding that the slowdown would continue in the consumer router market at least in the coming quarter ending June.
Jio has already shipped in more than 30 lakh Mi-Fi devices so far, according to Counterpoint. The total imports of routers to India, according to industry estimates, is worth $300 million between April 2016 and December 2016.
Worryingly for the router makers, Jio is currently offering 100% cash back on Rs 1,999 worth JioFi 4G router with 10 free vouchers of 5GB each that can be used over a period of 10 months, after the ongoing Dhan Dhana Dhan offer. JioFi which is currently available under version 2 and 3, supports 8-10 devices.
San Jose-based Netgear that commands nearly 33% of the market share in India’s Rs 600 crore Wi-Fi router market said it saw a 5% quarterly growth, thanks to its presence in the mid- to high-end segment.
Mumbai-based Digisol believes that the consumer segment was swayed after the Jio’s ambitious launch.
“Jio had certainly impacted consumer broadband market for few months,” Digisol Systems chief operating officer Arati Naik said, adding that the bearing was not much as the company, being a manufacturer, was able to control output to match demand.
China-based TP-Link has also seen a brief slowdown for a period succeeding the second-half of 2016.
“There has been a brief hiatus in market where both Jio’s free service and demonetization played an equal role,” Lynn Wang, Managing Director, TP-Link India, said.
Wang, however, said that there is a big market in India which still remains untapped, giving opportunity to expand and grow in the coming years.
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