|The Telsyte research shows that 52 per cent of mobile services in operation (SIO) are now on 4G networks, with penetration expected to reach 85 per cent by 2020.|
Meanwhile, Telsyte sees the market changing, with BYO mobile plans resulting in less long-term subscriptions.
Telsyte found that, with an estimated over 25 million handheld mobile SIO at the end of June, more than half of handsets are now on non-contract plans.
This, in turn, is creating opportunity for more movement between carriers. Telsyte notes that of those who switched mobile service providers last year, two thirds opted for non-contract plans, representing an increase of more than 10 per cent over 2014.
"Telsyte believes Telstra's high-profile network outages in the first half of 2016 combined with more competitive 4G plans available in the market will encourage mobile handset service subscribers to shop around," Telsyte observes.
Meanwhile, the move to 4G will create more competition around delivering services using faster download speeds and larger download allowances, including music and video streaming, and games.
"The ability of networks to tap into growing mobile trends such as Pokemon Go and live streaming will help grow data utilisation by consumers," Telsyte states. "In 2015, the average growth of data allowances was 76 per cent, however data usage only grew by 45 per cent."
Two million Australian smartphone users had downloaded Pokemon Go by the end of July, according to Telsyte estimates.
Telsyte additionally predicts that machine-to-machine (M2M) and secondary devices will be the main drivers of market growth towards 2020, with the increase of handset SIO limited to net population growth in a highly mature market.
With non-handset SIO typically having lower average revenue per user (ARPU) and not contributing as much profit per service when compared to handsets, Telsyte notes that this might impact carriers' profitability.
"Telstra is particularly vulnerable as it has experienced some of the lowest net SIO additions from handsets ever during six month to December 2015 and some 71 per cent of its new services came from lower-ARPU machine-to-machine (M2M) connections," Telsyte states.
"While Telsyte estimates Telstra will maintain a strong lead in the M2M (machine-to-machine) market, other service providers are likely to attack their handset market share aggressively."
More than half of consumers considering changing mobile service provider are driven by price, according to Telsyte research, with Telsyte senior analyst for mobile services Alvin Lee predicting price competition will likely see ARPU starting to decline for more providers in the 2016 second half.