Telstra share price shakes off dwindling residential market share

Telstra may be losing NBN market share but the market doesn't seem to mind.

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The Telstra Group Ltd (ASX: TLS) share price has been having a tough time of late.

Thankfully, the telco giant's shares are heading in the right direction on Friday.

In early afternoon trade, the Telstra share price is up almost 1% to $3.91.

Interestingly, this gain comes despite some potentially disappointing news this morning.

What's going on?

Telstra's shares are rising today despite the Australian Competition and Consumer Commission (ACCC) releasing data that shows the telco behemoth is losing market share to smaller competitors.

According to the release, Aussie Broadband Ltd (ASX: ABB) and Vocus gained almost 62,000 services in the June 2023 quarter, while the total number of residential broadband services on the NBN remained steady.

The data shows that Vocus grew by over 33,000 services, taking its market share to 7.9%, whereas Aussie Broadband gained over 28,000 services to a 7.5% share.

In addition, small providers such as Superloop Ltd (ASX: SLC) and Southern Phone increased their market shares to 3.1% and 1.4%, respectively.

Going the other way, market leaders Telstra and TPG Telecom Ltd (ASX: TPG) saw their collective services decline by almost 76,000 in total during the June quarter. This reduces their respective market shares to 41.5% and 21.7%. Optus' market share was steady at 13.1%.

ACCC Commissioner Anna Brakey said:

The sustained growth of smaller broadband providers shows that there is continued demand from consumers for innovative and competitive services.

However, judging by the Telstra share price performance today, investors don't appear overly concerned. Their focus is likely to be more on the company's lucrative mobile business rather than NBN services.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Aussie Broadband and Superloop. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Aussie Broadband and Tpg Telecom. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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