Australian MVNOs set to benefit as price hikes loom
SYDNEY, AUSTRALIA – Australia’s mobile services market turned a corner with handheld Services in Operations (SIOs) returning to growth for the first time since the start of the pandemic, according to new research by emerging technology analyst firm Telsyte.
The Telsyte Australian Mobile Services Market Study 2022 tracks SIOs (Services in Operation) in mobile handsets, mobile broadband and mobile IoT for business applications.
The study found the total number of mobile SIOs grew 696,000 (1.9%) to 37 million during the six months to December 2021, with handheld SIOs adding 271,000 connections.
The market recovery follows a handheld segment decline of 1.1 million SIOs during the 18 months between January 2020 and June 2021, as a result of closed international borders and stalling population growth.
Telstra had the highest mobile SIO growth during the 6-month period, followed by MVNO (Mobile Virtual Network Operators). Telstra’s net increase in SIOs was primarily driven by mobile IoT for businesses.
However, if mobile IoT is excluded from the total measurement, MVNOs outperformed the rest of the market because of more competitive mobile plans and offerings.
MVNOs leading the recovery
MVNOs now make up 17 per cent of the total SIOs as of the end of December 2021, up from 14 per cent in 2019 (just before the COVID-19 pandemic) and more than tripled in the last 10 years.
A third of the MVNO market is now made up of carrier sub-brands such as Amaysim and Belong. Telsyte believes the multi-brand strategy has become increasingly critical to the carriers’ ability to compete in more price-sensitive segments.
Telstra’s recent announcement of mobile plan price increases, in line with the CPI (Consumer Price Index), signals that low-price sub-brands might be even more critical to the carriers in the next few years.
Telsyte estimates up to one in six mobile service users could be looking at switching providers in 2022 with MVNOs likely to most benefit.
The study found 32 per cent of those thinking of changing their service provider said their current plan was too expensive. Network performance factors including coverage and reliability make up the top three churn factors.
5G, eSIMs gather pace
Telsyte estimates there were six million 5G mobile services in operation at the end of December 2021, a near three-fold jump from a year ago. This was mainly due to the increased availability of 5G handsets in the sub-$600 price range.
Consumers are eyeing 5G with two in five (39%) Australians regarding 5G access as important when choosing a service provider.
Australian 5G mobile users, on average, are using 43 per cent more data than those on 4G. However, the study also found 5G users are yet to take advantage of their larger data allowances and have lower data utilisation compared to 4G (20% on 5G vs. 27% on 4G).
Telsyte expects handset upgrades will continue to ramp up 5G uptake with around 60 per cent of SIOs expected to be on 5G by 2025 (currently at 16%).
In another boost for the market, the availability of eSIMs devices is reaching mainstream levels with 35 per cent of smartphones in use already supporting eSIMs.
“eSIMs are increasingly strategic to service providers for improving customer experience, sustainability and supporting new connected devices” Telsyte Senior Analyst, Alvin Lee, says.
Telsyte anticipates more providers will become ‘eSIM-ready’ later this year as the carriers expand eSIM support to their MVNO partners.
Currently less than one in ten eSIM-capable smartphones are utilising the feature as support is still limited to the main carriers and Felix Mobile, Gomo, Kogan Mobile, Lebara, and Woolworth Mobile.
For further information on the study or media enquiries contact:
Foad Fadaghi
Managing Director
Tel: 1800 313 142
Email: ffadaghi@telsyte.com.au
Alvin Lee
Senior Analyst
Tel: 1800 313 142
Email: alee@telsyte.com.au
The Telsyte Australian Mobile Services Market Study 2022 is a comprehensive study that provides subscribers with:
Market sizing and forecasts of the Australian mobile services market
Analysis of market share and carrier performance
End user trends across devices, application usage, platforms, channels and accessories
Tablet and computer purchase intentions and loyalty
Tablet audience estimates
Strategic analysis of market trends and issues
In preparing this study, Telsyte used:
Telsyte’s annual Digital Consumer survey conducted during December 2021 and 1st week of January 2022 with a representative sample of 1,114 respondents, 16 years and older.
Interviews conducted with executives from service providers, network operators, manufacturers, retailers, financial analysts and channel partners.
Financial reports released by service providers, manufacturers and retailers.
On-going monitoring of local and global market and vendor trends.
Analyst reviews of leading tablet and computer devices.
About Telsyte
Telsyte is Australia’s leading emerging technology analyst firm. Telsyte analysts deliver market research, insights and advisory into enterprise and consumer technologies. Telsyte is an independent business unit of DXC Technology. For more information visit www.telsyte.com.au
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