Wednesday, April 3rd, 2013

It sure does seem like every month heralds a new mobile phone service provider, with everyone from Aldi to Red Bull having a crack at the Australian market. And why not? The combined market share of Mobile Virtual Network Operators among Australian 14+ mobile phone users has grown for the 12th straight quarter, up from 8.4% in December 2009 to 13.5% at the end of 2012.

Mobile Virtual Network Operators (MVNOs) are retail mobile service providers such as Virgin, Amaysim or Boost that use an existing network under agreement with Optus, Telstra or Vodafone.

As of December last year, over a million more Australians 14+ had a mobile phone connected through an MVNO than did three years ago. In 2012 the annual jump in the number of Australians using an MVNO as their provider exceeded the total number of new users, indicating a high level of switching as well as new-user uptake.

The bulk of the market share growth in the last three years has come from an almost 4% point rise in the proportion of post-paid mobile phone users who are with an MVNO, from 5.2% to 9.1%.

Among MVNO customers, the most common reason for choosing a Mobile Service Provider (MSP) is cheaper rates at 59.6%, compared to 22.2% for Telstra, Optus or Vodafone. Only 13.9% of MVNO consumers chose their provider for better network coverage, compared to 40.1% of customers with one of the larger, network-owning and operating providers.

MVNO customers are more likely than customers of the larger service providers to have chosen their service provider because they were dissatisfied with their previous one or wanted to avoid contracts.

Andrew Braun, Mobile, Internet and Technology Industry Director, Roy Morgan Research, says:

“It is clear that the proportion of mobile users signing up to MVNOs continues to grow rapidly, particularly among the post-paid market. Collectively, these smaller providers are becoming increasingly competitive in the market due to their cheap rates and unlocked contracts.

“However while the overall market share for MVNOs is growing, so are the number of them competing for a slice. In the last few months we have seen the launch of Aldi and Kogan, although the latter is already under fire for advertising ‘unlimited’ calls and texts despite a clause in its acceptable use policy that allows the provider to disconnect up to 1% of its heavy use customers.

“It is evident that MVNOs form a part of the large MSPs’ broad strategy, especially Optus whose network serves over half the MVNOs. The question for consumers and MVNOs now is what differentiates them both from one another and from the main providers.”


Take-up of MVNOs over time - Source: Roy Morgan Single Source (Australia), July 2009 to December 2012, Australian Main Mobile Phone Users 14+, 6 month rolling average n=8,049.

Reasons for choosing service provider - Source: Roy Morgan Single Source (Australia), July 2012 to December 2012, Australian Main Mobile Phone Users 14+ n=9,180.

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Roy Morgan Research

Roy Morgan Research is Australia’s best known and longest established market research and public opinion survey company. Roy Morgan Single Source is thorough, accurate, and provides comprehensive, directly applicable information about current and future customers. It is unique in that it directs all the questions to each individual from a base survey sample of around 55,000 interviews in Australia and 15,000 interviews in New Zealand annually - the largest Single Source databases in the world. The questions asked relate to lifestyle and attitudes, media consumption habits (including TV, radio, newspapers, magazines, cinema, catalogues, pay TV and the Internet), brand and product usage, purchase intentions, retail visitations, service provider preferences, financial information and recreation and leisure activities. This lead product is supported by a nationally networked, consultancy-orientated market research capability.
Shaun Ellis
P: 03 9224 5332


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