Decline of the dongle: Research finds USB modems are falling out of favour

Australians are ejecting their dongle, turning instead to their smartphone for portable internet, according to research from Roy Morgan.

The popularity of mobile broadband connections such as plug-in USB modems, portable Wi-Fi modems and tablet SIM cards is declining, with only rural customers continuing to drive any real demand for the dongle.

The number of Aussies connecting with mobile broadband devices has slipped from 5.9 million (30.7%) a year ago, to 5.1 million (26.5%) in the six months to September 2014.

The biggest drop has been in the use of USB modems, down from 2.1 million users in the six months to September 2013 to 1.4 million this year.

However, demand is still coming from rural customers, where one in three people living outside capital cities have some form of mobile broadband connection, compared with less than one in four people who live in a capital city.

The study pins the reason for the decline on the rise of smartphones and their ability to function as a portable internet hotspot that connects to other devices.

“We’re moving from a time of personal internet data allowance to shared allowances,” Tim Martin, general manager of media for Roy Morgan Research, said in a statement.

“Our technology tracking data shows that people using USB modems tend to have only one or two devices in the household, while those using portable WI-FI are more likely to have three or more. Clearly, a dongle isn’t as useful when there is a need for multiple connections at once,” said Martin.

“So at a time when many households are getting their third, fourth, fifth or sixth mobile internet device, service providers such as Optus and Telstra have already introduced mobile data plans that allow consumers to share allowances across multiple devices and users.”

Martin said it will be interesting to see whether these offerings from the big telcos will help to slow down the rate of decline in the mobile broadband category.

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