The State of Wholesale in Australia

The following article is derived from the speech presented by Andrew Stojcevski, our Head of Marketing & Product Management of Optus Wholesale, at the CommsDay Wholesale Congress 2024. It captures the essence and key points of his address, providing valuable insights into the telecommunications industry.  

The telecommunications landscape is evolving rapidly, driven by technological advancements, changing consumer behaviour, and a growing demand for connectivity. At Optus Wholesale, we are excited to be part of this journey, and are committed to supporting our partners every step of the way. 

Partnering with Telsyte, we commissioned research to highlight evolving industry trends and outline areas of opportunity for our partners. Ensuring a broad spectrum of opinions, behaviours, and trends were captured, we believe we’ve accurately reflected the diverse needs and preferences of Australian consumers. 

Economy Impacts

While we’ve seen some easing in recent months, inflation continues to be a significant factor influencing consumer behaviour as many Australian household budgets are being squeezed. Rising costs across the board are prompting re-evaluation of spending, including on telecommunication services. 

The resurgence of international travel after years of pandemic-induced restrictions, has resulted in inflows of both short-term visitors and returning residents to Australia. The June 2024 ABS data showed that short-term visitor arrivals in 2024 were 659,000 – an increase of 5.4% from 2023,  and short-term resident returns saw a 15.1% increase from 2023 to 2024. Our research identified that one of the key drivers of steady MVNO growth has been these temporary visa holders looking for prepaid solutions upon arrival. 

Coinciding with the return to travel, Australia has also experienced a significant surge in migration, with numbers peaking at 448,000 in 2023.   This influx of new residents has brought increased demand for cost-effective and reliable connectivity solutions. 

Our Changing Market

Driven by a combination of the above economic factors and a growing preference for value-driven alternatives, MVNOs now account for 20% of all Australian mobile services. Telsyte data shows that there were 8.3 million MVNO services in Australia as of December last year, reflecting a 12% year-on-year increase. These Tier 2 providers are championing meeting consumer demand for flexible, affordable, and reliable mobile solutions. 

Despite economic challenges, Tier 2 brands have remained remarkably successful in their ability to foster strong customer loyalty, meeting consumer needs, and driving competition. Our research indicates that 38% of Tier 2 customers expressed low interest in upgrading to a premium Tier 1 offering, if economic conditions improved, and they could afford it. 

Another striking trend is the mainstream adoption of 5G, driven by the appeal of fast speeds, generous data allowances, and convenience, as 51% of Australians have now opted for plans that include these 5G capabilities. As 5G coverage continues to expand, we expect this trend to accelerate further, presenting a valuable opportunity for both Tier 1 and Tier 2 providers.  

ESIM technology awareness and adoption is also on the rise as awareness has reached 54%, and nearly 60% of consumers now own smartphones that support eSIM functionality. As more MVNOs enable eSIM capabilities, adoption rates are set to rise, offering a streamlined cost-effective alternative to traditional physical SIMs. 

As we look to the future, the opportunities for our industry are vast. These insights highlight the potential of the Tier 2 market and show that growth is sustainable beyond the current economic phase. At Optus Wholesale, we are committed to helping our partners seize these opportunities. 

Why Optus Wholesale

In the years since we entered the Australian telecoms market in 1992, the telecommunications landscape has transformed considerably. Despite changes and innovations that have fundamentally altered the way we connect, communicate, and engage, our commitment to the market is unwavering. 

From pioneering eSIM adoption, to offering 5G, to expanding 5G coverage and investing in customer service technologies, our focus on product innovation ensures that our partners can offer their customers the latest and greatest in connectivity solutions. 

Dedicated to being the wholesaler of choice, we continue to invest in our market, our partners, and our services to ensure that we meet the needs of the market today and in the future. By staying abreast of market trends, we can better anticipate the needs of partners and support their growth.