Mobile Virtual Network Operators (MVNOs) in Australia have exploded in popularity amid COVID-19, recording operating services (OIS) growth of 13% over the past year, while SIO with mobile network operators (MNOs) – telecommunications operators – plunged over the same period.
This is according to technology analyst firm Telsyte Australian Mobile Services Market Study 2021, who claimed that the growth of MVNO SIOs was driven by consumers looking for better deals, resulting in operator type making up 16% of all SIOs during the year, up 2% from compared to 2019.
Additionally, removing the sub-brands of carriers such as Belong, Gomo and Felix Mobile from the equation, the MVNO segment grew 14% year-on-year.
This turned out to be a positive point in the mobile services market, which recorded an overall decline of 1.7%, or a decrease of 606,000 WIS, compared to the previous year. Mobile network operators also hit SIO, recording an annual decline of 4.1%.
TPG and Optus were the hardest hit carriers during the year, according to the company, with total mobile SIO declines of 15% and 9%, respectively.
Telsyte claimed that the overall decline was due to the reduction in SIOs of prepaid handsets, which in turn stemmed from a lack of “temporary visitors” and new migrants, as well as lower connection demand of over devices to mobile networks.
However, the decline in WIS is expected to be relegated to the next two years, with the company predicting that the impact of the reduction in temporary visitors and migration will last until then.
In addition, Telsyte expects further market consolidation as the pressure on margins is felt.
“The current climate is difficult for low margin players and it will be increasingly difficult for mobile service providers to continue to compete on price alone,” said Alvin Lee, senior analyst at Telsyte.
Meanwhile, Telsyte expects the demand for 5G-enabled smartphones to increase dramatically over the next three years, from 6% of WIS on 5G currently to over 55% by 2024.
5G should also be presented as a potential alternative to the national broadband network (NBN) by Internet service providers if the margins can be improved.
A consumer survey carried out by the company found that around a quarter of Australians are interested in subscribing to such a service, and that it may in fact be vital for some providers in the future.
“5G home internet services are increasingly strategic for operators as they seek to leverage their infrastructure investments,” said Lee.
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