Death of dongles? The end might be near

With lots of options to choose from, to browse data, dongles soon may see its end

Arvind Balasubramanian, a marketing executive stopped lugging his laptop to every meeting he attends. He uses a sleeker and lighter iPad. He uses his laptop at home and in office, but he got rid of his dongle with a data card. 

 

“When I am at office, I use the internet from the office connection and have wi-fi at home. When I am travelling, I use data via phone and my tablet which has a micro-SIM inserted,” said Balasubramanian. He realised that he was way too many options to browse from and also got tired of paying multiple bills.

 

This trend might catch on and that is only a matter of time before dongles become obsolete, according to experts. The rise of high-speed data option across technologies like 3G which are catching on in urban areas might slowdown the growth in the dongles segment. 

 

Currently, the total dongle market is 3.5 million, and churns a turnover of Rs 500 crore per month. CDMA spectrum holders like Reliance Communications, Tata Teleservices and MTS are some of the biggest players in the area. Though GSM players like Idea, Vodafone and others too entered the market with their 3G offerings, their focus had mostly been on mobile-surfing rather than surfing heavy dongles that chokes the network.   

 

Tablets are not the only disruption for dongles. “Tablet users are picking up, so are smartphones. There are also larger smartphones with bigger screens which offer wide variety of usage. Over a period of time, users are moving  towards integrated devices,” said Mritunjay Kapur, country head of Protiviti Consulting. 

 

Large screen devices also provide for less cumbersome surfing experience as well. Smartphones can also be used a tethering devices to create local wi-fi hotspots. “Most smartphones have tethering capabilities these days, where you need not use a dongle,” said Kapur. 

 

Slashing of prices of high-speed data services could also be a factor. Last year, the prices of 3G services were cut, increased their uptake amongst subscribers. The network connectivity and spread increased as well, making dongles redundant for those who own smartphones and tablets. However, such users are few in number, currently. 

 

“Our dongle business is growing at 15-20%,” said Sandeep Yadav, head of data business, MTS India. He however admits that over the years, there might be a glass ceiling for this growth. “It will grow for a maximum two years,” he says. 

 

The CDMA service provider is working on increasing utilities of its dongles. It recently launched a dongle which is compatible with wifi, when connected to a power source. The dongle growth, the operator believes, will be linked to wifi which is growing due to increased multi-device phenomenon at  homes. 

“Each household has around 4-5 gadgets and all of them require data. Operators will look at options like pooled billing,” said Yadav. 

 

While the current dongle business is growing due to lower spread of Internet in India and also a steady growing population of first-time laptop users, who prefer dongles. High-speed Internet services are yet  to expand network across the country, leading to demand growth for dongles. 

 

The sustenance of the dongle business beyond its growth period is expected to come from an already existing large base of enterprise users. “Dongles offer a different purpose of connectivity. Though growth in high-speed data usage on mobile will continue to grow, I think dongles will continue to be around in the enterprise segment,” said Kamlesh Bhatia, research director, Gartner India.