Customers are leaving Optus, Telstra, TPG for smaller players offering better deals

Australian consumers are bailing on the top three biggest telcos in favour of the lesser-known names for a better price point for their internet, according to a new report from the Australian Competition and Consumer Commission (ACCC).

The NBN Wholesale Market Indicators Report reveals Telstra’s market share was down 0.3% to 43.7% this quarter, though it remains the dominant telco player in the country.

In second place, TPG was down 0.3% to 23.3% of Australia’s market share, while Optus was also down 0.3% to just 13.9% of the market share.

Compare that to the combined market share of smaller telcos, which increased by 84,414 customers to 11.8%. The biggest jump was from Aussie Broadband who increased its market share by 0.5% up to 6.1%.

It’s not a bad thing, ACCC commissioner Anna Brakey says, as competitive offers by smaller internet service providers are keeping the bigger names “on their toes”.

“The smaller internet providers are growing, and in doing so they are increasing competition in the residential broadband market,” Brakey said.

The exodus appears to be driven by price rather than product satisfaction. The Telecommunications Industry Ombudsman’s Quarter Two Complaints Report shows phone and internet complaints have actually declined again — the fifth consecutive period it has done so.

Residential consumers and small businesses made 18,386 complaints, down 14.2% compared to the previous quarter and down a mammoth 39.7% since last year, while internet complaints decreased 20.4%, the report found.

Internet speed is proving less important to customers than one might’ve thought too: the popularity of high-speed services over 100 Mbps fell by 40% in the March quarter, the ACCC’s report shows, following the end of the NBN’s ‘Focus on Fast’ promotional discounts in January.

It means that, as of March, the 50 Mbps service was the preferred speed for 58% of consumers, the report continued, but Brakey says that made sense to her.

“Not all consumers need a very high speed service, and some may not even notice the difference at the top end of speeds,” she said.

Canstar Blue has previously said 50 Mbps should be “more than enough” for high-standard web browsing, scrolling social media, and streaming video.

It comes as rumours swirl that NBN Co. is eyeing a wholesale price increase for retailers to the tune of up to 20% for smaller plans.

The company submitted its ‘Special Access Undertaking’ to the ACCC on March 29 which contained a roadmap of price hikes to 2040 — the ACCC must sign off on all price increases.

Whether or not the rumours are true will be revealed next week, when the ACCC is set to release the details of the proposed changes after the federal election.