Telstra may lose ground in regional Australia

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Telstra may lose ground in regional Australia

ACCC predicts up to 15 percent of the market may be up for grabs.

Telstra may lose some of its traditional dominance in regional Australia as the NBN is completed, with the ACCC estimating up to 15 percent of the market could move to alternative providers.

The Australian Competition and Consumer Commission (ACCC) made the prediction in its annual communications market report. [pdf]

“Telstra maintains its dominance across fixed line and mobile services, however its share of the market is being challenged as some consumers switch to new entrants on the NBN and in the mobile market,” the ACCC said.

The regulator noted that as NBN Co has pushed more into metropolitan areas, “Telstra’s competitors are capturing an increasing share of new NBN customers, pushing Telstra’s share of newly migrated services below 50 percent.”

However, it’s Telstra’s traditional grip on regional Australia that is likely to be loosened in the coming years, according to the ACCC.

“When structural reform of the fixed line sector is complete, following the rollout of the NBN, the competitive landscape in regional Australia, where Telstra’s competitors hold just 45 percent of the wholesale market, may begin to mirror metropolitan areas where Telstra’s competitors account for 60 percent of wholesale market share,” the ACCC said in its report.

“Over recent years we have observed that competition from challenger brands has ensured that Telstra’s customers, including those in regional areas, are able to benefit from the increasing value being offered in communications markets as a whole.”

Telstra CEO Andy Penn said in mid-2018 that the re-nationalisation of fixed-line infrastructure - and the re-positioning of Telstra as “a reseller of broadband services with other operators” - was causing the telco some financial pain.

Since then, it has consistently reported quarterly revenue hits running into the hundreds of millions of dollars that it blames on the NBN.

It has also consistently lobbied for regulatory intervention on NBN pricing, which it argues should be cut by at least $20 a month.

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