Australians are adopting faster internet speeds, says analyst Telsyte
Although 98% of Australia’s population has access to 4G, only 52% use the mobile internet service. Expected to reach 85% of the population within four years, Telsyte reported that the main drivers for growth in the Australian telecommunications industry will be machine-to-machine applications as the mobile phone industry is saturated. With lower average revenue per user (ARPU), telecommunications providers including Telstra and Vodafone could see declines in revenue towards 2020.

Technology industry analyst firm Telsyte has released a report on the mobile landscape in Australia, revealing that half of all mobile devices are 4G connected, and predicting that no-contract mobiles and M2M will be the trends towards 2020.

Telsyte reported that 52 percent of mobile users are now on 4G networks, with the expectation that 4G penetration will reach 85 percent within the next four years.

This is despite Telstra's 4G network now reaching 98 percent of the Australian population, with plans to reach 99 percent by mid-2017; Vodafone Australia's 4G network reaching 95.3 percent of the Australian population; and Optus' reaching 94 percent of the population.

According to an OpenSignal report from June, however, Telstra's 4G network is available around 76.27 percent of the time; Vodafone's is available for 77.61 percent of the time; and Optus' is available for 73.4 percent of the time.

Telsyte also estimated that there were more than 25 million mobile services in operation as of the end of June, with half of these handsets on no-contract plans.

Stats from Kantar last week showed the no-contract segment of the mobile market rising by almost 4 percentage points over the April to June quarter, to account for 14.5 percent of the total mobile market, with post-paid at 53.2 percent, and prepaid at 32.3 percent.

Telsyte said no-contract plans increased by over 10 percent between 2014 and 2015.

According to the analyst firm, the main drivers for mobile growth over the next four years will be for machine-to-machine (M2M) applications and "secondary" devices, as the mobile phone market is at saturation.

It also predicted that since M2M services have lower average revenue per user (ARPU), telecommunications providers -- particularly Telstra -- could start losing revenue towards 2020.

"This might impact the profitability of carriers," Telsyte said.

"Telstra is particularly vulnerable, as it has experienced some of the lowest net SIO [services in operation] additions from handsets ever during six month[s] to December 2015, and some 71 percent of its new services came from lower ARPU M2M connections.

"While Telsyte estimates Telstra will maintain a strong lead in the M2M market, other service providers are likely to attack their handset market share aggressively."

M2M services still only account for 5 percent of total mobile services revenue, however, according to Telsyte senior analyst for mobile services Alvin Lee.

Vodafone Australia last week reported earnings before interest, tax, depreciation, and amortisation (EBITDA) of AU$412 million for the first six months of the financial year on revenue of AU$1.6 billion for a net loss of AU$163.7 million.

Telstra and Optus are due to report their financial results next week.