Telstra's upgrades to street cabinets will drive some frustrated customers back from mobile broadband to fixed-line internet services, according to the Commonwealth Bank.
In November last year, Telstra embarked on an 18-month upgrade of 2000 street cabinets around Australia, with new "Top Hats" that will allow Telstra to deliver ADSL2+ services to customers in areas where it had not been previously possible.
According to Commonwealth Bank global markets research for January, this upgrade, in conjunction with the growth of smartphones, tablets and prepaid mobile broadband, will cause post-paid mobile broadband growth to slow in this quarter.
"Fixed broadband ... continues to grow and Telstra's Top-Hat program will see some users switch back to fixed from mobile broadband for home use," said Alice Bennett, equities analyst with the Commonwealth Bank.
The fixed broadband market would continue to grow, Bennett said, but Telstra will continue to shed voice-only customers. Telstra and TPG will outpace market growth thanks to TPG's bundle pricing and Telstra's price drops, Bennett said, and Optus will post gains due to aggressive pricing.
She said Telstra's privacy breach at the end of 2011 will have a small degree of impact on growth for the telco, and Internode's acquisition by iiNet "could also generate some churn away from Internode customers to other carriers".
For the December 2011 quarter, Bennett predicts Telstra will have picked up 35,000 fixed customers, 11,000 will have signed up for TPG, while iiNet will have lost 2000 customers due to off-net pricing problems.
Vodafone drives mobile competition
Very aggressive pricing, high subsidies for smartphones and promoting its network improvements will see Vodafone turn around its fortunes in the mobile industry, according to Bennett. The telco will gain just 1000 customers in the December quarter after losing 375,000 in the first half of last year in the peak of the company's infamous network issues.
But Bennett said that things are improving for Vodafone.
"We continue to believe Vodafone net adds momentum will return in  as fallout from network issues roll off, brand perception improves (including due to '3' brand phase out) and aggressive offers continue to gain traction," she said.
These gains made by Vodafone will come at the expense of Optus, she said, adding the telco will also churn customers to mobile virtual network operators (MVNO) such as iiNet or TPG which serve customers over Optus' own network.
For the December quarter, Optus is expected to add 115,000 new mobile customers, while Telstra will add 342,000 and Vodafone will pick up 1000.