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Sub-Carriers, eSims Threaten Major Telcos’ Stronghold

The rise of eSims and climbing phone bills are driving more customers away from major telcos towards ‘virtual’ network operators.

The Australian Mobile Services Market Study 2022 by research group Telsyte found that, while Australia is behind the rest of the world when it comes to adopting Mobile Virtual Network Operators that use the major telco’s infrastructure, but offer cheaper and more flexible deals, the gap is lessening.

17 per cent of people now use a MVNO, compared to 5 per cent in 2011.

The amount of services in operation in Australia has risen to 37 million, well over one phone per person. This figure climbed by 696,000 during the six months to December 2021.

This healthy market means the majors have been able to bump up their prices.

“The market is back to growth again, and there’s now an opportunity to increase prices and move more people onto 5G,” Foad Fadaghi, Telsyte’s managing director told the AFR.

“It’s quite likely that everyone will follow Telstra’s lead, especially if it’s able to demonstrate that it can lift its ARPU and not lose significant market share.

“Whenever there are price increases, there’s impetus for people to shop around, and for some providers that could be lucrative.

“MVNOs have been the fastest-growing segment in the mobile phone business over recent years, and it’s likely to continue.

 

“Access to eSIMs is going to change the market significantly. As more handsets support eSims, there’s a huge opportunity for MVNOs to bring the next generation of customers over.

“Anything that makes it quicker or easier to change carriers is naturally going to be resisted by the big market players. But the trouble is, eSIMs can no longer be ignored.”

The market is growing all the time. As it stands, 35 per cent of smartphones in use already support eSIMs.

However, less than one in ten eSIM-capable smartphones are utilising the feature.

“eSIMs are increasingly strategic to service providers for improving customer experience, sustainability and supporting new connected devices” Telsyte Senior Analyst, Alvin Lee, says.

As the carriers expand eSIM support to their MVNO partners, they will no doubt cut their direct customer numbers.

Aside from the major carriers, only Felix Mobile, Gomo, Kogan Mobile, Lebara, and Woolworth Mobile are using eSims.


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