Telstra kills mobile market; Optus, Vodafone wilt



news The nation’s largest telco Telstra has continued its incredibly strong drive to take back a huge slice of Australia’s mobile market, adding 739,000 customers in a period in which both Optus and Vodafone appeared to go slightly backwards.

The telco — whose Next G network has long enjoyed significantly broader coverage and often speeds than the networks of its competitors, following an early entry into both 3G and 4G services — this morning revealed it had added a further 739,000 customers to its mobile network in the six months to the end of December 2013, taking its total customer base to 15.8 million services.

The company now has some 4.1 million mobile devices on its 4G network, including some 2.9 million handsets and 1.2 million wireless broadband devices.

The figures compare extremely favourably to those of its rivals. Optus this morning revealed it had lost 57,000 customers over its most recent quarter, bringing its total mobile customer base to some 9.43 million. The company’s overall mobile revenue sank by seven percent in the quarter, although it added some 429,000 4G mobile connections in the quarter to take its total to 1.81 million.

Worst of all is Vodafone. The company revealed last week that it lost some 22,000 customers in its final quarter of 2013, meaning that it has just five million customers after it lost around 2.5 million in its infamous ‘Vodafail’ episode. Vodafone recently announced that it had passed the one million customer level on its 4G network, which offers higher speeds in some areas but significantly smaller coverage compared to the networks of both Optus and Telstra.

According to ZDNet, Telstra chief executive David Thodey crowed at Telstra’s financial results briefing session today regarding the company’s mobile infrastructure. “”We now have 3,500 4G mobile base stations switched on and working around Australia,” the CEO reportedly said said. “[It is] four times larger than any other comparable network in Australia.”

The news comes as debate continues about the extent to which Vodafone will be able to ride out its customer loss storm and re-enter the mobile market as a competitive force, and about to what extent Optus remains a viable competitor to Telstra in the mobile arena. Telstra has added millions of customers to its mobile network over the past several years, siphoning many from Vodafone, while Optus’ customer count has remained largely stagnant in that period.

However, all three telcos continue to plough hundreds of millions of dollars into mobile infrastructure, particularly in the area of 4G support, where a race is currently taking place to blanket the nation with mobile towers supporting the new standard, using various wireless frequencies.

I’ve been warning for a long time that Telstra is killing competition in Australia’s mobile industry. In June 2012 I wrote:

“Right now, when it comes to mobile, Telstra holds all the cards in Australia, and it is playing those cards for all it is worth; rapidly soaking up hundreds of thousands of customers, destroying Vodafone’s revenue stream wholesale, and holding Optus back with one hand while it’s raking in cash with the other. It has the best handsets, the best network, the most marketing clout, the best reputation for network quality and a colossal lead in 4G infrastructure.

Now, from a customer viewpoint, there is no doubt this is fantastic — for now. Telstra is bending over to make customers like myself happy, and I’m happy to admit I’m a Telstra mobile customer. There is simply no point for someone like myself (who needs access to the Internet pretty much 24×7, anywhere I am), to sign up with Vodafone or Optus, when I know I’m going to get reduced coverage and speed from the alternative networks for only a slightly cheaper cost. And Telstra has been the only mobile carrier I recommend to anyone who asks for years now.

But long-term, what Telstra is doing right now represents a troubling sign for Australia’s mobile industry. Just as it did in fixed broadband, Telstra is now winding back competition in the mobile telecommunications space. One really has to wonder how long multinationals like SingTel and Vodafone will continue to be committed to piling hundreds of millions of dollars into mobile phone infrastructure in Australia, when it is clear they are only going to see very moderate levels of growth in return — and are even going to have to struggle to keep what customers they have. And who will keep Telstra honest with strong competitive offerings, when the company gets too far ahead for its own good?

In five years’ time, just how much market share will Telstra have in Australia’s mobile phone industry? If it keeps on adding 900,000 new mobile connections every six months and converting its customers to 4G while its rivals do diddly squat, I would have to say the answer will be: Most of it.”

In comparison to when I wrote that, a year and a half ago, the situation appears to have stabilised a little at the moment, with Optus and Vodafone at least holding relatively steady. In addition, both have continued ploughing hundreds of millions of dollars into their mobile networks.

This is very good news for Australian consumers. Sure, Telstra is still massively growing its mobile base, while the others aren’t. But compared to a year ago, when it appeared Vodafone was on the brink of folding and that there was no way Optus was going to be able to keep up with Telstra’s 4G network rollout, thinks are looking significantly up. Optus’ 3G and 4G infrastructure is now pretty good and definitely competitive to Telstra’s, while Vodafone is at least not losing hundreds of thousands of customers every quarter any more, and has actually taken the 4G speed lead in some city areas.

Let’s hope the good news keeps on going and that both Vodafone and Optus get back to their feet in the mobile scene. We can’t afford to let Telstra have its own way in this area for ever.

Image credit: Telstra


  1. Marginally cheaper? Optus MVNO ‘s must be picking up steam , from a year ago when only the whirlpool crowd was onto them , now they are rapidly becoming mainstream.

    Telstra $60 plan is matched for dollar value if not coverage by an $18 plan elsewhere

    Although i dont see Optus making any anouncments about it , probably the revenue per customer is reduced down to insignificance.

    • I’ve been on TPG mobile since 2009 and I’ve saved a bucketload. But my plan is grandfathered so a new customer couldn’t get the value I get for the $15/m I pay. 10x the value for 1/3 the cost compared to my previous Optus plan.

      I’ve tried a Telstra sim in my iPad (2) and it still dropped out in the same spots as my phone (Nexus 4) so for me it’s not worth paying 3-4 x more for similar value on my phone. I did originally try a Vodafone sim but it was hopeless!

  2. Any analysis or speculation on Vodafone and the future shape of the Oz mobile market is incomplete without reference to the renewed speculation yesterday by News Ltd media on the prospects of some form of a Vodafone fixed line service provider deal with fibre, mobile specrum and fixed line customer owning TPG. Renee take note and have a gander at all News Ltd articles on this matter from yesterday.

    “Vodafone Australia, a joint venture between the UK’s Vodafone Group and Hong Kong’s Hutchison Telecommunications, is expected to make a merger play within the next 18 months, with TPG Telecom tipped as the most likely candidate. The group has reportedly also held talks with iiNet over the last year and a half.”

  3. It is interesting to see Telstra continue to charge a significant premium for their superior coverage, when in fact the coverage in terms of population habitat is still excellent for Optus (they claim 97% of Oz population covered). Having just recently gone through a cost exercise for our company comparing mobile plans, Optus is incredible value on a $69 unlimited calls plan, you need to pay almost twice that with Telstra for an unlimited calls plan.

    Not spruiking Optus here, just pointing out the fact Telstra is charging a whooping premium for their superior network coverage. If your situation allows for it, you can find some serious value amongst its competitors. The day Telstra starts competing on price is the day Vodafone goes out of business (unless merger with TPG as speculated), and Optus would only survive on a double-down on infrastructure.

    • “population habitat is still excellent for Optus ”
      And as it always has been (probably always will be too) this is deceptive as it’s the quality of coverage that matters, if you cannot get reception when you are within the “footprint” for Optus but Telstra’s signal is strong its a good incentive to change.
      This is why carriers with high population %’s are losing to Telstra, you can rely on coverage with them, sure you pay a premium but if you need connectivity sometimes you have to pay for it.

      In my circumstance this has not been more noticeable than when moving from SA to QLD, Optus plans for the kids as they are distinctly cheaper than Telstra and due to topography generally reachable, here in QLD not so much at all and considering changing the 3 phones back to Telstra.
      As there is poor sighting of the local Optus towers the ability to contact people via Optus is poor whilst Telstra is consistently reliable; which I’m prepared to pay for.

  4. While I have shares in Tel$tra, I find them too expensive for my personal use. Though I am disappointed by speeds from my Optus reseller when I am in large regional centers. Made it extra hard to get info on the fires when I got stuck.

  5. My wifes new Galaxy Note 3 only got 60mbps down and 25mbps up on Optus 4G network. Just saying…

  6. I’ve just moved states to Victoria and we needed a 4G service to give us internet while staying in temporary accommodation so I looked at the big 3, VodaFail’s coverage across Melbourne was pathetic, Optus’s coverage was better but the only Telco that had decent coverage in the areas I needed it was Telstra.

    As a result it was simply no contest, I went with Telstra and price was irrelevant in the end. Some might say “why didn’t you settle for a 3G service?” And the answer is simple, I tried running my household from a 3G service for a few weeks a couple of years ago and it was completely unworkable due to nowhere near enuf bandwidth being available.

    You’d think that VodaFail and Optus would have learnt their lesson from the 3G wars and taken 4G seriously early on but apparently not – they are wholly and solely responsible for their own demise IMO!

  7. All our work phones are with Telstra as it is part of our risk management. While optus or voda might cover the main towns we operate in Telstra also cover much of the major roadways between those towns.

  8. As a corporate, with many remote sites, we pretty much have no choice but Telstra. And as usual it shows in the pricing.

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