Telstra Corporation Ltd grows mobile subscribers

Source: Telstra presentation

Telstra Corporation Ltd (ASX: TLS) continues to dominate the mobile market, winning market share from its rivals, and remaining well ahead of the second placed Optus.

Vodafone Australia, Virgin Mobile and TPG Telecom Ltd (ASX: TPM) have all lost market share as Telstra and Optus maintain their dominance compared to a year ago, according to a new report from research house Kantar.

Despite its three recent network outages, Telstra still holds 41.1% of the total mobile market, with Optus in second place with 22.7%. The two increased their market share by 1.4% each by the end of March 2016, compared to the previous year.

Vodafone lost 1.3% to slip to 15.2% market share, Virgin Mobile was down 0.9% to 5.6% and TPG dropped 0.8% to hold just 2% of the overall market. TPG moved its 320,000 customers over from Optus to Vodafone in October last year, after it announced a partnership and $1 billion deal with the third-ranked telco. A possible closer tie-up between the two is also a possibility.

mobile market share

Source: Kantar. *VHA includes Crazy Johns/Three


Kantar data suggests that users are moving from pre-paid and post-paid plans to no contracts, which represents 14.3% of the whole mobile market after recording growth of 4.8%. The research house says that a number of mobile virtual network operators (MVNOs) including Amaysim Australia Ltd (ASX: AYS) were experiencing strong growth due to their support of the use of streaming services, and offering value for money.

Amaysim and Virgin Mobile are both using the Optus network, while Aldi mobile customers utilise parts of Telstra’s network.

Foolish takeaway

The competitive advantage that Telstra has over its competitors should ring out loud and clear. Despite 3 separate network outages and usually higher priced offerings, the telco still managed to increase its market share.

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Motley Fool writer/analyst Mike King owns Telstra Corporation and TPG Telecom shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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