The latest study from the emerging technology analysts at Telsyte shows that MVNOs are leading "the charge as price competition heats up in mobile services" as our appetite for "lower costs mobile plans is growing", while Australians are showing "conditional interest in a fourth mobile operator".
MVNOs (Mobile Virtual Network Operators) are all those networks that piggy-back on one of the existing providers, and don't have any infrastructure of their own, with Amaysim operating on the Optus network, AldiMobile on Telstra Wholesale and Kogan Mobile on Vodafone.
Telsyte states that MVNOs "re-emerged as the growth leader in the first half of 2017, with over 200,000 new SIOs (services in operation) collectively, beating the individual performance of Optus, Vodafone and Telstra (in that order)".
At this point, Telsyte says its research shows that "price or value has risen to overtake network performance as the most important factor when the average consumer chooses a mobile services provider".
This contrasts with "network performance" having been "the most important factor as rated by consumers since 2012".
"Similarly," we're told, "the main two reasons survey respondents indicated they are considering changing mobile providers was price and promotions from a competitive provider."
My thought is that, given the great value that MVNOs have offered, especially since Amaysim arrived on the scene with its pioneering $40 unlimited voice and text plan with 4GB data per 30 days to change the MVNO industry as we knew it forever, and for the better as time has shown, it is no surprise to see the MVNO space really maturing while still in a very competitive space.
On top of this, the network technology is being continually being improved, upgraded, expanded and soon, enhanced with the new 5G technologies on their way, and already here in trial forms.
Telsyte senior analyst Alvin Lee says: “We are entering an increasingly price competitive mobile services market in this pre-5G period", which is true. Significant for the industry is Telsyte's research, showing that "over half of handset plans are on non-contract plans. This trend has been steady for many years. However new research shows that very few (15%) that have gone off contract plans have gone back to them in the last five years".
In my own experience, I have been a customer of Amaysim, Boost, both Kogan Mobiles, Telstra Pre-Paid and Vodafone Pre-paid, porting my number to all of these providers, and haven't gone back to a full contract.
What I've done instead is to go with month-to-month contracts with two top telcos that mean I'm on a post-paid plan that I can leave at any time and port to someone else, but which offer unlimited local, national, mobile and international calls to a range of destinations, with large enough amounts of data to make me happy to stay, and not port back to a MVNO.
So, I don't qualify for the 15% that have, but as Telsyte sees "re-contracting of premium priced handsets such as the iPhone X and the Samsung Note 8" being "likely to help the Mobile Network Operators (MNOs) fight back in the second half of 2017", I wonder what the stats on those who move back to contract plans increases more than usual in this second half as people seek to get the latest technology without paying it off in full in one go.
Predicting this out with an answer is Telsyte estimating that "up to 65% of iPhone sales in 2H 2017 will be via mobile contracts, compared to around 50% in previous iPhone 'S' model years".
Then we get the three major networks as a fourth soon awakens, with TPG predicted to "shake up the Australian market".
Telsyte says its analysis of the potential impact of TPG’s announcement that it plans to "roll out a fourth Australian mobile network" shows "consumers are generally receptive to a new competitor in the market".
Well, we've certainly seen the success that Aldi has had in shaking up the Woolworths and Coles duopoly, but whether TPG can replicate that so easily is yet to be seen.
Even so, Telsyte's research indicates that "2 in 5 Australians (16 years and over) would consider moving to the new TPG mobile network when it is ready", but Telsyte then notes, however, that "most of this is conditioned on TPG providing clear benefits such as free trial periods, unlimited data or significant bundling discounts".
Lee notes that "the challenge for TPG will be to profitably bring new services to market without simply attracting bargain hunters", and it's easy to see he's right. TPG clearly looms as a threat to competitors and an opportunity for its customers, and who knows what eventual roaming deals TPG might be able to do in the future.
Indeed, it should be noted that TPG is not a new player in the mobile market – it already operates its own MVNO on the Vodafone network, which was previously with Optus.
Telsyte notes that TPG's current mobile base has been under pressure, despite the addition of iiNet customers.
So, while "the new network is expected to have an impact, Telsyte believes it will be difficult for the carrier to reach a million SIOs within two years of launching its network".
The conclusion is that "TPG and other carriers will need to broaden their focus beyond handsets to grow SIOs in coming years. The growth of handset services is expected to only follow population growth, with wearables, Machine to Machine and eSIM capable 2-in-1s presenting the best opportunities for carriers in the next two to three years".
Telsyte says its comprehensive Australian Mobile Services Market Study FY2017 provides subscribers with:
- Market sizing and forecasts of the Australian mobile services market
- Analysis of market share and carrier performance
- End-user trends
- Market trends
- Mobile services market KPIs
In preparing this study, Telsyte tells us it used:
- Interviews conducted with executives from mobile service providers, device vendors and retail channel partners.
- An online survey of a representative sample of Australians 16+ years of age conducted with 1056 respondents in August 2017.
- An online survey of a representative sample of Australians 16+ years of age conducted with 1060 respondents in November 2016.
- Financial reports released by service providers.
- On-going monitoring of local and global market and vendor trends.