Small telcos continue to grow their broadband market share

Smaller broadband providers increased their market share in the wholesale NBN market during the June quarter of 2022, and a record number of telecom operators now have their networks connected to NBN at all available physical locations, the latest ACCC report NBN Wholesale Market Indicators Report revealed.

The report examines the wholesale market for NBN services, specifically the residential broadband services that retailers purchase from NBN for resale to consumers.

During the June quarter, small retail service providers continued to steadily increase their market share in the wholesale market at the expense of the four main providers, increasing by 0.8 percentage points (with 77,758 services additional) to 12.6%. In the June 2021 quarter, their combined market share was 8.2%.

This growth was led by Aussie Broadband, which increased its market share to 6.4% (up 0.3 percentage points).

Wholesale market shares fell slightly for established providers Telstra (down 0.4 percentage point to 43.3%), TPG (down 0.2 percentage point to 23.1%), Optus ( down 0.1 percentage point to 13.8%) and Vocus which is the fourth largest telecommunications operator (down 0.1 percentage point to 7.2%).

“The growth of smaller providers is increasing competitive tension in broadband markets, and many Australians will see the benefits,” said ACCC Commissioner Anna Brakey.

“Consumers have a wide range of choices for their broadband retailer, allowing them to choose the product that’s right for them.”

The report also shows that broadband providers have extended their presence to the NBN’s 121 Points of Interconnection (POIs), which are the physical locations where providers can connect to the NBN.

During the June quarter, at least 17 vendors directly acquired NBN services at all 121 points of interest, compared to 13 vendors in the March quarter.

“More providers connected at all interconnection points means consumers will have a wider choice of broadband providers to choose from, regardless of where they live,” Ms. Brakey said.

The report also shows that just over 8.7 million residential broadband services are now on NBN, and three-quarters of them are broadband packages of at least 50 Mbps or more.

In June 2022, 50Mbps service was the preferred speed level for 55% of Australians, up from 58% in the March quarter.

“The popularity of higher speed tiers means there is strong retail competition for these customers, so we recommend consumers check back regularly for new offers or new discounted offers,” Ms. Brakey said.

Retail service providers acquired slightly more connectivity virtual circuit capacity (bandwidth) in the June quarter. The average capacity acquired per user increased from 2.76 Mbps in the March quarter to 2.84 Mbps in the June quarter.

Originally published by ACCC

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