Telstra hoovers up NBN share

The telco has extended its share of the NBN wholesale market, but could yet face a challenger.

TPG Telecom is Telstra’s closest rival, with a 26 per cent share.

Telstra continues to hoover up the lion’s share of the NBN wholesale market but the Australian Competition and Consumer Commission boss Rod Sims it’s too early to declare the incumbent telco the winner at this stage.

The latest instalment of the competition watchdog’s NBN Wholesale Market Indicators Report shows Telstra extending its lead in the quarter ending June 30, with the incumbent holding a wholesale market share of 48.2 per cent.

TPG Telecom is Telstra’s closest rival, with a 26 per cent share and Mr Sims told The Australian that it’s likely that the telco will close the gap on Telstra as the NBN is rolled out in the metros.

“The network rollout has so far focused on regional areas where Telstra has a natural advantage, TPG is an aggressive player in the metro areas so the report doesn’t give you a full final picture just yet,” he said.

Macquarie Research analysts have echoed the sentiment telling clients that while Telstra is holding to a solid share outcome in the early stages of the NBN rollout it has been helped by the inclusion of voice-only lines and the regional bias of the rollout.

“TPG’s quarterly performance was a little disappointing, although we expect its momentum will improve as the NBN’s rollout hits more Metro areas.”

According to the ACCC’s report, NBN Co was supplying 1,136,346 wholesale access services and had been contracted to supply 1,235 gigabits per seconds (Gbps) of aggregate network capacity, up from 941,235 services and 1,004 gigabits per second as at March 30 2016.

The other two major operators in the space — Optus and Vocus — are lower down the pecking order, with Optus’ market share at 13.6 per cent and Vocus at 6.3 per cent.

With four major players carving up most of the market between them Mr Sims said that there was still ample competitive tension on display.

“We have four major players here, but unlike the banks, each is offering a fundamentally different value proposition to customers.”

The ACCC has also raised the competitive stakes on privately owned fibre networks, with the regulator declaring a five-year ‘superfast broadband access service that applies to non-NBN services with downstream data rates normally more than 25Mbps. The declaration will see the fibre-to-the-basement (FTTB) network operated by TPG subsidiary AAPT, and Telstra’s fibre networks in South Brisbane and Velocity estates opened up to other retail service providers, with Mr Sims saying that the move will give smaller operators a better chance to compete on the merit of their service offering.

Under the terms of the declaration, access prices to these services will be regulated for a period of five years. TPG’s other assets — the TransACT/iiNet VDSL network and the HFC network in regional Victoria — are for the time being exempt from the declaration for now.