The prediction is from Australian analyst firm Telsyte, which says the high penetration rate will enable a “new era of high-speed, data-intensive mobile applications for streaming music, video communications and collaboration.”

Telsyte estimates 46% of total mobile connections will be 4G by mid-2016, and in some cases will provide an alternative solution to fixed-line broadband. The Telsyte Australian Mobile Services Market Study 2012-2016 analyses and forecasts movement in the mobile services market, with updates on carriers’ strategies, MVNO performance, and end-user trends.

Telsyte research director Foad Fadaghi said the forecast for 4G adoption in Australia has been revised up due to a number of significant market changes in 2012. “Our latest research indicates a combination of new handsets, strong carrier deployment of 4G services, and mobile broadband as an alternative to fixed-line services is resulting in faster than initially expected uptake of 4G services in Australia,” says Fadaghi.

The rate of uptake is highly dependent on the availability of 4G devices and the popularity of the iPhone 5 and other 4G smartphones and tablet devices from HTC, Nokia, Motorola and Samsung is accelerating the adoption of next generation mobile service. More than 20 LTE-enabled devices will be available through carriers by the end of this year.”

Telsyte estimates by end of 2016, more than 80% of smartphones sold will be capable of utilising Australia’s 4G networks. Telsyte analyst Alvin Lee says while the 1800MHz band is emerging as one of the common LTE bands globally, the auction outcome of 700MHz and 2500/2600MHz spectrum will still affect the future of LTE in Australia.

“These bands are supported across the globe in different countries, and are likely candidates to mitigate future LTE roaming challenges” says Lee. According to Telsyte’s research, streaming content on mobile devices has become a regular routine for many users, with video clips, radio and music amongst most popular applications. Interests in maps and navigation applications have also risen in the past year due to popularity of smartphones.

Lee says latest Telsyte research indicates more than 30% of Australian of smartphone users are now regularly using over the top (OTT) voice or video call applications, with this figure to accelerate over the coming years.

“Some applications require a fast and stable data connection to provide users a more complete experience. With typical LTE speeds of 40Mbps a lot of opportunities will be created for data hungry applications like streaming media services, turn-by-turn navigation and video applications,” Lee says.

The Telsyte Australian Mobile Services Market Study 2012-2016 includes sizing and forecasts in 2G, 3G and 4G connections, and prepaid versus post-paid connections and 2012-2016 estimates. It also includes individual carrier and MVNO performance review with market share estimates, competitive analysis of MVNO market and discussions on strategic issues.

This report covers the landscape of Australian mobile services market, with more than 20 companies considered including: Alcatel-Lucent, Amaysim, Apple, Australia Post, China Telecom, Cisco, Dodo, Ericsson, Gotalk, HTC, Huawei, iiNet, Lebara, Microsoft, Motorola, Motorola Solutions, Nokia, Nokia Siemens Networks, Optus, Samsung, Telstra, TPG, Vertel and VHA.