The Telsyte Australian Mobile Services Market Study 2022 found that mobile services in operation (SIOs) grew 696,000 (1.9%) to 37 million in December 2021 with handheld SIOs adding 271,000 connections.

The study tracks SIOs in mobile handsets, mobile broadband and mobile IoT for business applications.

Telsyte says 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 six-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 numbers, MVNOs outperformed the rest of the market because of more competitive mobile plans and offerings.

MVNOs now make up 17% of the total SIOs as of the end of December 2021, up from 14% 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 claims the multi-brand strategy approach has become critical to the carriers’ ability to compete in more price-sensitive segments.

Telstra’s 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.

Thirty-two percent of consumers are thinking of changing their service provider, lamenting 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.

5G mobile users, on average, are using 43% 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 drive 5G uptake with around 60% 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% 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 Felix Mobile, Gomo, Kogan Mobile, Lebara, and Woolworth Mobile.

This first appeared in the subscription newsletter CommsWire on 5 July 2022.