Mobile virtual network operators (MVNOs) in Australia saw a burst of popularity amid COVID-19, recording growth in services in operation (SIO) of 13 per cent during the last year, while SIO with mobile network operators (MNOs) -- telco carriers -- dipped during the same period.
This is according to technology analyst firm Telsyte’s Australian Mobile Services Market Study 2021, which claimed MVNO SIO growth came down to consumers looking for better deals, resulting in the operator type making up 16 per cent of all SIO during the year -- up 2 per cent from 2019.
Additionally, when taking the sub brands from carriers, such as Belong, Gomo and felix Mobile, out of the equation, the MVNO segment grew 14 per cent, year-on-year.
This proved to be a bright spot in the mobile services market, which recorded an overall decline of 1.7 per cent, or a drop of 606,000 SIOs, compared to the year prior. Mobile network operators also took a hit to SIO, recording a yearly decline of 4.1 per cent.
TPG and Optus were the worst-affected telcos during the year, according to the firm, with total mobile SIO declines of 15 per cent and 9 per cent, respectively.
Telsyte claimed the overall decline was due to the reduction in prepaid handset SIOs, which in turn came from a lack of “temporary visitors” and new migrants, as well as a lessened demand for connecting more devices to mobile networks.
However, the SIO decline is expected to be relegated to the next two years, with the firm forecasting the impact of the reduced temporary visitor and migration numbers to last until then.
Additionally, Telsyte expects further market consolidation as margin pressures bite.
“The current climate is challenging for low-margin players and it will be increasingly difficult for mobile service providers to continue to compete only on price,” said Telsyte senior analyst Alvin Lee.
Meanwhile, Telsyte expects demand for 5G-enabled smartphones to jump up dramatically over the next three years, going from 6 per cent of SIO on 5G currently to over 55 per cent by 2024.
5G is also expected to be presented as a potential alternative to the National Broadband Network (NBN) by internet service providers if margins can be improved.
A consumer survey by the firm found that about a quarter of Australians are interested in subscribing to such a service, and may in fact be vital to some providers in the future.
“5G home Internet services are increasingly strategic to carriers as they look to drive value out of their infrastructure investments,” Lee said.