Over Half Of NBN Customers Are On Telstra

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Telstra added 292,000 customers on the National Broadband Network (NBN) in the second half of 2016 but margins on those connections are down due to increasing competition in the market. Here's what you need to know.

At today's Telstra half-year financial results (ending December 31, 2016), the telco revealed it has added 292,000 new customers for its NBN services over a six-month period. It now has 792,000 NBN customers; making up 51% of the fixed-line NBN market. Around 636,000 of those connections are for fixed-voice and data bundle and 52,000 are data only connections.

Bear in mind, Telstra has started migrating its copper network users onto the NBN so not all of those connections are from new customers. According to the financial results, Telstra added 90,000 fixed data retail customers in the second half of 2016.

As of December 31, 2016, there were 1.6 million active users on the NBN network.

"Telstra has performed well in a highly competitive market, gaining subscriber numbers in mobiles, retail fixed plans and market share in NBN despite increased competition," the company said in its financial report.

While Telstra has accumulated a lot of NBN customers, growth in competition in the market has driven down the revenue it makes per connection. Average revenue per user (ARPU) for fixed-data services, including NBN services, has been driven down as competition heats up.

Earnings before interest, tax, depreciation and amortisation (EBITDA) margins for fixed-line services are also down:

"Fixed voice and fixed data EBITDA margins declined compared to the prior corresponding period due to the upfront costs in connecting our NBN customers in addition to growing ongoing network payments to NBN Co."

Telstra is banking on its bundled services and complementary products to attract even more customers to subscribe to its NBN services:

"We are determined to become Australia’s leading provider of consumer and business services on the nbn. We have a clear strategy to differentiate our services based on network quality and unique products and content experiences that are better with Telstra, such as Telstra Air and Telstra TV."

Overall, Telstra's half-year financial results were disappointing. Profits were down by 14.4% to $1.79 billion and revenue declined 3.6% to $12.8 billion.

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Comments

    I am seeing a pattern emerge among people I have dealt with. A few months before NBN will be available in an area Telstra start calling people and offering them a super cheap deal on their ADSL or Mobile Broadband, with a new 24 month contract of course.

    Then NBN comes online and Telstra call back the customers and tell them they are now required by NBN Co to move the customer over to NBN as the landline phones will very soon be disconnected (which isn't true, it takes them years to disconnect the landlines). Of course the NBN plan they offer doesn't have any special discount applied and the customer will have to pay a hefty fee to break their recently signed 24 month contract if they want to go with another provider. This way Telstra fraudulently takes away the choice that the NBN was supposed to give people.

    I have also heard unconfirmed reports from people who tell me Telstra representatives told them that because they were a Bigpond ADSL customer NBN Co won't allow them to change to a different provider for NBN.

    I now advise all my customers to check with NBN Co if Telstra start calling offering discounts.

      We had Telstra tell us that because they were a Bigpond ADSL customer NBN Co won't allow them to change to a different provider for NBN and that we have to change over as the network is being switched off. That was 2 years ago, at the time we were also told that it had to be with them and we couldn't change providers. We didn't have to start a new contract period but we did have to stay locked in to our 24 month ADSL contract.

      I wasn't too happy with the way we were treated (specifically my wife because she was the one they were dealing with, felt that she was being taken advantage of because she had no idea what they were talking about and signed up figuring she didn't have a choice; however we were left happy with the service.
      That is until the contract was expired. Once that happened we were automatically charged an extra $10 a month with no notification, and because we had an automatic payment set up through online banking we were unaware of the bill not being paid in its entirety until about 6 months later when we started getting letters demanding payment.

      Called Telstra to ask what was going on and explained the situation but they were uncooperative, so we paid the outstanding amount and decided to look at other options. Found Optus were very competitive and because my wife had a phone with them received a further discount so we signed up. Cancelled Telstra and that when they decided that they could assist with better rates, but it was too late.

      Unfortunately, since changing to Optus we've experienced a much slower connection speed that fluctuates significantly throughout the day (0.5mbps - 9.5mbps on the basic plan that's supposed to be 12mbps) and is almost unusable when trying to work from home.

      TL:DR, Telstra suck, but product is good, Optus are cheap but the product is very average.

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