Will outpace 4G.
The adoption of 5G is set to be faster than the previous generations, according to research from analyst firm, Telsyte. The local market is forecast to reach 15 million 5G handsets between six to 12 months sooner than when the market shifted from 3G to 4G technologies.
The Australian mobile services market grew by around half a million new services in operation (SIOs) in the six months to December 2018, reaching 35.4 million at the end of December 2018. Telstra and MVNOs were the top two for SIO net growth, driven by IoT and competitive handset plans, respectively.
Telsyte research shows more than 70 per cent of handset SIOs are now BYO, up from around 64 per cent in 2015. “The prolonging smartphone replacement cycle and attractive pricing have been driving the BYO market,” senior analyst, Alvin Lee said.
Telsyte expects the BYO market will continue to grow steadily in Australia, however handset contract plans will benefit most initially from the arrival of 5G as there will be more 5G handsets priced above $1,000 in the next 18 months.
The availability of 5G handsets and networks is set to be faster than previous generations, with consumer expected to respond. The smartphone market is ripe for upgrades with survey data showing a quarter of consumers are holding off buying a new smartphone until 5G becomes available. Unlike 4G, 5G handsets are already available from the outset.
“Australia is at the very beginning of 5G, but when 5G becomes the standard, consumers won’t be able to look back,” Lee said.
Telsyte also anticipates widespread network availability to be quicker for 5G than it was for 4G with Optus and Vodafone moving faster with their roll outs than with 4G. According to Telsyte’s mobile services research, the total services revenue has been in decline since December 2017, mainly due to price-driven competition, giving carriers added incentive to try and arrest decline and 5G has the potential to halt declining revenues.
In a positive sign for carriers, one in four Australian mobile users are willing to pay more for a 5G service compared to their existing service. Among those willing to pay more for 5G, the average is between $5 and $10 a month.