Australians are shunning mobile Wi-Fi modems and turning to smartphone tethering and public Wi-Fi hotspots for their internet, new research reveals.
The market for mobile modems grew just three per cent in the 12 months to December even as mobile internet traffic continued to soar, according to Telsyte.
Growth was hit by the proliferation of public Wi-Fi hotspots, which are "sprouting like mushrooms" at places such as shopping centres and local council buildings, said Telsyte senior analyst Alvin Lee.
About four in every five businesses with more than 20 employees now offer Wi-Fi in the office, he added.
Meanwhile, more people are using their smartphones to transmit internet to their other devices such as tablets and smartwatches.
Telcos hope mobile Wi-Fi modems will appeal to users who own several devices and spend their time on the road.
But according to Telsyte's research, most tablet usage remains at home.
"Telcos have had some success with mobile Wi-Fi modems, but it is expected smartphone tethering will continue to disrupt this market," Lee said. "The opportunity for dedicated mobile broadband is diminishing even as mobile traffic continues to grow."
About 31 million devices used mobile internet in Australia as of November, 23 per cent of which ran on high-speed 4G networks.