New Delhi: Supply pains have gripped the most critical work-from-home equipment category: WiFi routers, data cards and dongles.
Retailers and broadband providers have run out of WiFi equipment stocks mainly in metros due to supply shortages from the likes of Tenda, Netgear, TP-Link, ZinQ, Reliance Jio, BhartiAirtel etc. And this can hurt data revenue for telcos and fixed broadband providers in the fast-growing home broadband category, telecom analysts said.
Two of Jio’s partners which manufactured JioFiber boxes recently exited contracts, unable to absorb the sharp increase of 60-70% in prices of integrated circuits. Rashmi Rare Earth Ltd, another manufacturer of JioFiber set-top boxes, said it has component stock that can only last a few days.
“Supply problems had started arising in mid-2020 after the India-China border tensions, but from the past three months, the prices of integrated circuits have gone through the roof and the issue is not going to normalise so soon,” said Santosh Prasad, business head at Rashmi Rare Earth.
“Government must take strong measures to promote Make in India for local component manufacturing,” he added.
Jio did not respond to ET’s query seeking comment.
A source close to Airtel said, despite global pressure, there is a steady supply of Airtel Xstream boxes and we are able to execute orders on time.
A Delhi-based Hathway broadband connection provider said the shortage has been persistent since 20-25 days and is getting extreme every week. “It started with a delay of 2-3 days for routers to arrive but now we are clearly telling customers that we can’t promise a timeline to set up a new connection. We are unable to retain customers with urgent requirement due to the delays,” he said.
Another provider in Kolkata for Tikona Broadband said it is only providing connection to customers who can arrange a router by themselves from the market or order online. “We are completely out of stock this week,” he said.
An executive at a Reliance Digital centre in Kolkata said they do not have any stocks of the popular JioFi dongle, and have no visibility on when fresh stocks will arrive.
“We got around 3 lakh devices but all were sold in a very short time weeks back… we have had no stocks ever since,” he added.
US-based computer networking device company Netgear said besides component shortage, lockdown restrictions have disrupted the smooth flow of shipments and logistics.
“We have a huge pile up of pending orders for the last 10-15 days on e-commerce, internet service providers and from offline distributors. We even have to delay our product launches due to the supply constraints, which will persevere throughout the year” said Marthesh Nagendra, country manager-India, ME & Saarc at Netgear.
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ZinQ Technologies, which sells work-from-home accessories like laptop cooling pads, keyboard, mouse, UPS for routers etc. said the global semiconductor shortage has created challenges in procuring raw material.
“This year is going to be a sellers’ market where stock availability will drive sales. Prices are expected to rise significantly, which has previously never happened in the IT industry,” said Arnav Mutneja, founder of ZinQ.
The shortage could impact broadband proliferation in India and hurt high revenue user addition in the fast-growing home broadband category for Airtel and Jio, telecom analysts said.
“Fixed line ARPUs (average revenue per user) are higher than mobile ARPUs as users recharge for high value family plans. Though the segment is small, the stock-out situation can taper the momentum of user addition in the near term,” a Mumbai-based brokerage analyst said.
Industry estimates suggest that there has been a 50-60% surge in broadband data consumption over the past two months and may further grow by 10-15% in the current quarter, ET has reported. There are 22 million wired, or fixed line, broadband subscribers in India.
