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Tuesday, 25 June 2019 12:50

5G adoption drives mobile services market: report

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With more than 15 million 5G handset services in operation expected in the Australian market by the end of June 2023, the adoption of 5G is set to be faster than the previous generations of cellular networks, according to a new analyst report.

According to the Australian Mobile Services Market Study 2019 from analyst firm Telsyte, the local Australian market is forecast to reach 15 million 5G handsets between 6 to 12 months sooner than when the market shifted from 3G to 4G technologies.

The Australian mobile services market grew by about half a million new SIOs in the six months to December 2018, reaching 35.4 million at the end of December 2018 - with Telstra and MVNOs the top two for SIO net growth, driven by IoT and competitive handset plans, respectively.

And the research shows more than 70% of handset SIOs (including prepaid, post-paid BYO M2M and post-paid BYO contract) are now BYO, up from around 64% in 2015.

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“The prolonging smartphone replacement cycle and attractive pricing have been driving the BYO market,” Telsyte senior analyst Alvin Lee says.

Lee expects the BYO market will continue to grow steadily in Australia, but says, however, that handset contract plans will benefit most initially from the arrival of 5G as there will be more 5G handsets priced above $1,000 in the next 18 months.

And he says that the availability of 5G handsets and networks is set to be faster than previous generations, with consumers expected to respond.

“The smartphone market is ripe for upgrades with survey data showing a quarter of consumers are holding off buying a new smartphone until 5G becomes available.

“Unlike 4G, 5G handsets are already available from the outset.

“The first 4G handset in Australia (HTC Velocity 4G) was released three months after Telstra officially launched 4G.

“Australia is at the very beginning of 5G, but when 5G becomes the standard, consumers won’t be able to look back” Lee says.

Telsyte also anticipates widespread network availability to be quicker for 5G than it was for 4G with Optus and Vodafone moving faster with their roll outs than with 4G.

According to Telsyte’s mobile services research, the total services revenue (measured half-yearly) has been in decline since December 2017, mainly due to price-driven competition, giving carriers added incentive to try and arrest declines.

Telsyte research shows 5G has the potential to halt declining revenues – and in a positive sign for carriers, some 1 in 4 Australian mobile users are willing to pay more for a 5G service compared to their existing service. Among those willing to pay more for 5G, the average is between $5 and $10 a month.

The report forecasts that the arrival of 5G is also expected to drive business investment, especially with the potential of next generation IoT applications.

Telsyte forecasts enterprise 5G opportunities driven by application development, IT services, platforms and connectivity could reach around $45 billion per annum by the mid-2020s – while the share of total 5G spending on network connectivity is expected to increase from around 1% in 2020 to nearly 15% by the mid-2020s as more devices and services connect to the 5G networks.


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Peter Dinham

Peter Dinham - an iTWire treasure is a mentor and coach who volunteers also a writer and much valued founding partner of iTWire. He is a veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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