The report, from Roy Morgan Research, says that MVNOs are resellers of network bandwidth from one of the main players such as Telstra, Optus and Vodafone – and although the majors still have their network used, "they are disadvantaged by the rise of MVNOs, because they lose direct contact with the customer and therefore lose the ability to add value by charging higher prices and increasing margin which is taken by the MVNO".
Over 6.7 million Australians (32.6%) now have a pre-paid mobile phone, and an increasing share of these are bought via an MVNO such as those operated by the likes of Aldi Mobile, amaysim, Kogan, Boost, Lebara, Lycamobile and others, according to the research conducted by Roy Morgan in the six months to December 2018.
The company says that MVNOs are now used by nearly two million Australians or 29.4% of consumers who have a pre-paid mobile phone.
“In contrast, the market share of the traditional MNOs such as Telstra, Optus and Vodafone has dropped to 71% of the consumers who have pre-paid mobile phones. This is down 2.4ppts from a year ago and down 8.7ppts from the period of the six months to July 2014.
“The combined market share in the pre-paid mobile phone market is greater than 100% which is because there are several consumers who have multiple mobile phones.”
Michele Levine, chief executive, Roy Morgan, says the increasing market share taken by MVNOs in the pre-paid mobile phone market is driven by many factors.
“The pre-paid mobile phone market in Australia has increased by over 400,000 in the last year up from under 6.3 million at the end of 2017 to over 6.7 million in the six months to December 2018,” she noted.
“The majority of these new users of pre-paid mobile phones are opting to choose an MVNO such as Aldi Mobile, amaysim, Lebara or Lycamobile rather than a traditional MNO such as Telstra, Optus or Vodafone.
“Over the last year an extra 280,000 Australians signed up to use an MVNO for their pre-paid mobile phones while around half as many, 140,000, signed on to one of the traditional MNOs for their pre-paid mobile phones.
“The biggest beneficiaries of this trend are the leading MVNOs, including Aldi Mobile, which increased its market share of the pre-paid mobile phone market to 5.9%, up 0.8ppts in a year, and aaysim which increased its market share to 5.4%, up 0.3ppts in a year. Lebara has a market share of 1.8%, up 0.6ppts and is now just behind Lycamobile on 2.2% market share.
“For the traditional MNOs, the biggest winner in the pre-paid mobile phone market was Vodafone which increased its market share to 16.8%, up 0.7ppts in a year to over 1.1 million. However, Vodafone still trails both Optus, with over 1.5 million pre-paid mobile phone users, and clear market leader Telstra with over two million users.
“Driving the increasing adoption of these MVNOs are a number of trends including Australians looking for a better deal and ‘switching’ providers to find a good deal, as well as younger Australians entering the mobile phone market for their first time and taking advantage of competitive deals on offer from the likes of Aldi Mobile.
“In addition, the Roy Morgan data shows there are many international students and young Asian millennials from countries such as India and China are attracted to familiar international brands such as Lebara and Lycamobile.
“The attraction of a pre-paid mobile phone is also supported by the flexibility it offers. Users of pre-paid mobile phones aren’t tied to a monthly plan that may last for two or more years and can be on the lookout for an even better deal that might come along at any time.”