Telstra says it has 50 percent NBN market share, wants more


news Telstra this week said it had already taken a 50 percent market share of National Broadband Network customers and wanted to push to achieve even more, in news set to call into question controversial NBN decisions made by the Government and the ACCC meant to advance broadband competition.

The specific market share make-up of retail Internet service providers on the NBN network is not currently known, as the NBN company does not break out usage of its network along company lines.

However, up until this point, it has been assumed by many in Australia’s telecommunications market that ISPs such as iiNet had been able to steal large chunks of the NBN market share, due to their early engagement with the network.

In early 2013, iiNet stated that it had taken the lion’s share of new NBN customers at that point, due to the fact that it had engaged with the NBN process strongly and early, familiarising itself with the NBN company’s technical processes and marketing itself actively to customers.

In February 2014, iiNet reiterated the comments, noting that it was “leading the pack” in terms of connecting customers to the NBN and had a 25 percent market share of NBN customers at that point. In comparison with iiNet, rivals such as Telstra, Optus and TPG have been relatively slow to fully engage with the NBN process over its early years.

However, comments made by Telstra this week appeared to indicate that the trend has reversed, with the nation’s incumbent telco having regained the lead in terms of NBN market share.

The Daily Telegraph reported the following this week, based on an interview with Telstra head of customer service delivery Brian Harcourt:

“Telstra currently commands a 50 per cent market share of the NBN, which equates to about 250,000 customers, but the telco is looking to significantly increase that as the rollout of the infrastructure project gathers pace.”

Telstra and the NBN company have been contacted in an effort to ascertain whether the figure is correct.

The news appears set to call into question a number of controversial decisions which the Federal Government and the NBN company have made with respect to the NBN project in general.

The original version of the NBN policy initiated by Labor in April 2009 had a number of aims. Principally, the policy aimed to provide a mechanism to upgrade Australia’s ageing broadband networks, setting an infrastructure foundation which would help to bolster the nation’s digital economy and boost productivity.

However, the policy also aimed to deal with the long-term dominance of Australia’s telecommunications market by Telstra. The telco’s position as Australia’s dominant telco stems from its history as the incumbent (only) Australian telco for much of the past century.

The policy aimed to separate Telstra from its network assets — assets which it had used to disadvantage competitors in the past. This would theoretically help to create a level playing field for competitors which would help to rein in Telstra’s overwhelming market dominance.

However, the news about Telstra’s market share this week reveals that the policy of reining in Telstra on the NBN appears to be broadly failing.

One of the key decisions made by the ACCC which appears to have impacted on this process is the decision to force ISPs to connect their own networks to a total of 121 Points of Interconnect with the NBN network if they want to provide a national service.

The NBN company itself had argued for a much more limited model involving 14 Points of Interconnect, as this would allow smaller ISPs to compete with large ISPs such as Telstra on the NBN. This was a view backed by smaller ISPs such as Internode (since bought by iiNet).

However, the ACCC ultimately went with a model supported by larger telcos such as Telstra and Optus which would see almost all POIs located in Telstra’s telephone exchanges, where the larger telcos already largely had their own networks connected.

In 2010, as the decision was being made, Internode managing director Simon Hackett warned that the ACCC’s 121 POI model was “insane” and would lead to strong consolidation of the ISP industry, as smaller players would not be able to compete with telcos such as Telstra on the 121 POI model.

Hackett similarly warned that the Connectivity Virtual Circuit model used by the NBN company to charge ISPs for usage of its network would lead to a “valley of death” for small ISPs, as the model would not allow small ISPs to successfully make the transition to the NBN network.

True to Hackett’s predictions, that consolidation has taken place since the POI and CVC models were introduced, with only a handful of ISPs left in Australia’s broadband industry.

Since that time, it appears Telstra has been able to leverage the situation to take the majority of the NBN market share, mirroring its dominant market situation for existing technologies such as ADSL and 4G mobile broadband.

Image credit: Telstra


  1. Could to be to do with how they handle the NBN about to go live in an area. Several people I work with have recently had the NBN switched on in their area. In each case they were contacted by Telstra and told they needed to be upgraded to continue to get Internet services and that it would cost them X dollars. With very little resistance that became zero dollars. They are trying to switch them over as soon as it goes live and with the switch comes a 24 month contract extension.

    • That’s what I’ve experienced.

      Multiple communications from Telstra telling me that I have to switch over. On the phone it was “switch over before the end of the month or you’ll be disconnected”. Online and SMS it’s “switch over to avoid interruptions” but no (false) deadline given.

      The “end of the month” deadline was in the middle of last year, and yet here I am still on Telstra cable, and at a lower price then what they offered on the NBN.

    • Different story for some of us not on a Telstra service.
      Despite already being connected to FW NBN for the past 18 months their site informs me “NBN not available in your area” & offers me ADSL instead.

  2. I think the issue here is mostly with FTTN, for the longest time there the list of providers for FTTN wasn’t very big, mostly Telstra, Beyond, Optus, and 1 or 2 others, iiNet didn’t even have FTTN plans ready or anything.

    So of course, with all the nodes coming online, people have been pretty much forced towards the likes of Telstra or Optus (or going with say TPG).

    So while iiNet may have reigned supreme with say FTTP, due to their lack of FTTN in early RFS nodes, they haven’t been getting as many customers.

    • iiNet also == TPG.

      To be honest I think the general lack of competition will just drive more people Telstra’s way as if nothing else they’re the lesser of several weevils.

      • They might equal that, but iiNet didn’t have any FTTN plans at all for people.

    • Simon M has part of the problem: TPG was gifted all of iiNet’s clients.

      The biggest part of the problem is Aussie laziness. Which telco is the biggest by a very long way in Oz? Now, why is that telco so huge in Oz?
      Answer: 1. OK, it was the FIRST and for far too long the ONLY telco in Oz. Your (grand)dad probably had a bakelite rotary dial fitted by the PMG. Later it was maintained/replaced by Telecom Australia. And then by Telstra.
      2. When Australians were eventually allowed by Telstra to have mobile phones, who had all the necessaries at least ready-to-go?
      3. And when it came to out-of-city comms, who was the ONLY telco allowed to use CDMA? Or, more accurately, which telco refused to allow CDMA to other telcos?

      Aussies are used to relying on Telstra. Aussies will forgive Telstra just about any sin. If you’re not with Telstra, not only are you a bloody galah, you’re likely un-Australian.

      And that is why, as I’ve mentioned in another post, Ziggy and Sol got out too early, too soon. If only they had just hung in there they too could soon be in total control of Australia’s internet comms.

      I’m wrong about the laziness bit. To steal an ad line, “Why wouldn’t you want what’s best?”

      • Tell me about it. No matter how many times I hit Enter it wouldn’t keep the carriage returns when saving it. Believe me, I’m far more annoyed than anyone. Hoping I’ll be able to fix it tonight.

        • It’s 14:07 WAST here. Your petition seems to have paragraphs… At any rate there are blocks of text with blank lines separating them.

          The paras or lack of them don’t worry me. TL;DR;DS. Edit it down so I can digest it. So Bill can digest it.

          • I just read it. Yes, it’s a bit long, certainly longer than necessary to get the point across, ask the question, or make the point to the reader, but it is full of very useful and interesting information. To be honest, it reads a bit like an indictment against Turnbull far more than an attack on Shorten – the criticism of Shorten seems (to me) to be almost apologetic, like it’s necessary but regrettable. Fall on your sword for the good of the nation. Because you can’t hope to defeat the evil Turnbull, so step aside so that someone else can do what’s necessary.

            So I dunno, personally I like it, but completely understand that many might dismiss it because it contains more than a couple of (short) paragraphs. I hope not – short attention spans are a big part of why we’re in this problem in the first place.

            So I implore you to take five minutes to read it, Gordon. You might be pleasantly surprised. Personally, I’ll be sharing this far and wide… We need to do whatever we can to get rid of Turnbull and I just don’t see Shorten coming up with the goods.

          • I very much agree with you UG, now that I can read it I agreed with the sentiment and signed the petition.

            I doubt shorten would take any notice tho, however decent he may be, he does seem to think being pm is his destiny.

          • Which is precisely why such a change is necessary – he’s too arrogant by far. I don’t like the man. I respect that he is probably very competent, but he is not likeable.

  3. Just waiting for the entire MtM Charlie Foxtrot to be gifted back to Telstra and the Libs destruction of the NBN will be complete…

    • So I couldn’t help but read that in a Palpatine sort of way. If that was intentional good show ;-)

    • @ Derek O, Telstra won’t buy this mess back they have more respect for money than the Coalition has.
      Didn’t someone say there is only 1000 residences connected to FTTN so that means Telstra has 500 of them, If I was Telstra I wouldn’t be popping the champagne corks yet. But of cause Telstra will get a large chunk of the market but they don’t own the network anymore and that’s a relief.
      Telstra was the first hurdle and the Coalition will be the second.

      • Good point, who knows what’ll happen!

        Btw, I’m guessing the Telstra HFC customer retention rate will be mega, prolly make more money from ditching the maintenance bill too !

  4. As each copper service is de-activated Telstra get a payment which is a cash benefit other ISPs don’t get.

    TPG CEO David Teoh was quoted in a recent SMH piece saying that service delivery over NBN is less profitable than over their own ADSL infrastructure. He intimated that they were not in a hurry to migrate customers, but also wanted to avoid loosing them.

    Its a different set of numbers that go into the balancing act.

    So, what would be really interesting to know is whether Telstra are picking up new customers or whether its just the timing of the migration profile which is different. Also I’m sure Telstra have deeper pockets to secure market share at this point.

    The 18 month window from RFS to copper cut off allows a lot of new infrastructure to go under utilised.

    • I used to think Stamp Duty was a highly profitable taxation rort. Then I did my homework on CVC… Deity!!!!!! How come the pollies missed this for our telephone lines? Were they stupid or something?

    • I reckon 50% is a lot less of a share they what they have in the ADSL market so I’m not surprised they’re not happy about it atm.

      TPG are so tight with their utilisation of their own networks that its not surprising their costs are less (so is their service)!

      Teoh doesn’t have a choice when the copper gets cut it gets cut (far worse with FttN as they can’t have ADSL + VDSL running at same time doubt there’s 18 months there either). If you don’t migrate them then someone else likely will poach them and do so instead.

  5. Dillusional to believe 14 POIs is better than 121. 121 creates opportunities for much more competitive backhaul to POIs.

    If people believe that 14 POIs would have been cheaper, they also have to believe CVC charges are also cheap. More traffic forced onto NBNs network means more traffic charged at CVC style cost models.

    RSPs having opportunities to get traffic off of NBNco’s monopoly network, and onto somebody else’s cheaper network sooner, is much better for consumers.

    Competition lowers prices. No competition, government mandated profitable monopolies have no reason to voluntarily lower prices unless they’re told to – and they’ll resist doing so for as long as they can.

  6. I am thinking of moving into a building that has NBN fibre and well I will be staying with Telstra… Why, because it just works and the support is there if I need it. Suffering congestion to me isn’t worth saving a few dollars a month with a smaller player. Hence why I will also never be with anyone other than Telstra for mobile. If Telstra has 50% share then good on them, means the customers have spoken and decided to stay or sign up cause the service is good and worth the money. No one is forcing people to stay with Telstra.

  7. Telstra are the only ones with the CVC, national and international bandwidth to handle 100Mbps NBN connections! I am not surprised their market share is increasing. Anybody that complains about “slow” NBN issues usually get directed to Telstra NBN!

  8. NBN is rolling out Malware nodes in inner city Newcastle the closest to me is over 500 premises away and I have been getting home ph calls and mobile SMS’s etc to sign up with them for the past 2 months as my contract lock in has ended. I pointed out to the Telstra sales person that the NBN was not ready to switch on yet as I had not been notified by NBN and to the best of my knowledge I had 18 months from that point to decide which carrier I went with. Additionally I pointed out that they had limited range of plans and far more expensive plans than my current ADSL 2 bundle that I negotiated and I could not find any guarantee of minimum download speeds in their offers. I will be checking all the carriers offers as the current ADSL 2 speed has dropped from 10+ Mbps in the last 6 months to 2.5Mbps in the evening with constant dropouts and the highest 5.5 Mbps with less dropouts in the morning. Telstra IT support person after checking with supervisor said the dropouts were unacceptable and they would monitor my line however the speeds were acceptable for when the peak usage congestion occurred. Visiting daughter best summed it up ” your internet is rubbish”

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