Analysts at Telsyte predicted mobile service revenue in Australia will decline for a second consecutive year in 2020, with a slowing economy expected to reduce uptake of 5G handsets as consumers wait for more affordable devices.

The research company predicted a knock-on effect from reduced appetite for next-generation handsets on overall service uptake, more than halving its prediction for 5G services in operation by end-2020 to 2.4 million.

Service revenue was tipped to decline by as much as 10 per cent this year, after a 4.1 per cent year-on-year fall in 2019 to AUD13.3 billion ($8.2 billion), while net additions are expected to be flat or decline for the first time in a decade.

Between 2016 and 2019, the number of new mobile services in operation increased by 800,000 to 1.1 million annually, it said.

However, it noted connection numbers would not negatively impact monthly mobile data usage, estimating this could grow by more than 30 per cent this year to an average of 8.4GB across all devices, compared with a 13 per cent rise in 2019.

This is, in part, due to increased use during a lockdown to inhibit the spread of Covid-19 (coronavirus).

And it predicted current movement restrictions would eventually come good for the industry, ultimately fuelling interest in upgrading to 5G smartphones while also bolstering demand for features including video communications, streaming media and gaming.