Telstra vs Optus: The Fight Between The Biggest Australian Mobile Service Providers

By | August 6, 2014

With 97% and 94% population coverage in Australia, Telstra and Optus are, respectively, the two top mobile companies in Australia. In what follows, we present a brief comparative analysis between these two rivals.

By the end of last year, Telstra had cemented its position as the top mobile service provider in Australia. Its total user base stood just a shade under 16 million – significantly more than that of its closest competitor, Optus (less than 9.5 million). With Australia currently in the midst of a smartphone boom, this would be the perfect time to take stock how the leading mobile operator companies in Australia are doing:

 

  1. Both Telstra and Optus are trumping Vodafone – Their internal rivalry aside, Telstra and Optus are really piling on the pressure on Vodafone Australia. After the much-publicized ‘Vodafail’ incident happened, the company was left with only around 5 million users – and has since lost many clients too. It is going to be an uphill task for Vodafone to win back a significant market share in the foreseeable future.
  2. The market share percentages – As a recent Roy Morgan Research revealed, Telstra, with around 40% market share in Australia, is still streets ahead of its rivals. Although Optus is some distance back, its share is hovering around a decent 25% figure mark – with slight growth last year. Vodafone is just about clinging on to the third spot (with a share of a touch below 21%).
  3. Services offered – Optus and Telstra are more or less matching each other, as far as their portfolios of mobile services are concerned. In addition to mobile and high-speed web access services, Telstra also has long-distance calling and 4G options in its service bouquet. This year, the company consolidated its global presence, and its clientele of 4G LTE services has witnessed a spurt. Optus, on the other hand, provides both domestic as well as international telephony services in/from Australia – along with subscription television and business networking options. The 4G market has also witnessed the entry of Optus, and there are plenty of Optus 4G subscribers at present in Tasmania.
  4. The price factor – This is where Optus enjoys an advantage over Telstra. The latter’s mobile service plans bear relatively high price tags. The starting charge for ‘included services’ is a pretty hefty 60 AUD (monthly). The Optus plans are significantly cheaper, as are those of Vodafone and Virgin Mobile. For budget smartphone-users, Optus has emerged as a handy alternative. Among premium users, Telstra, understandably, remains more popular.
  5. Caps vs Minutes – In Australia, most mobile service and network marketing happens in terms of ‘caps’. Telstra follows this model – and curiously, many feel that the calculation of ‘caps’ is too complicated to understand properly. Optus has taken this opportunity, to provide users details of ‘minutes used’, instead of a data figure. Not only has this been an endeavor to please customers – but it is a seamless way to earn more revenue as well. As soon as the usage threshold (which depends on the plan selected) is crossed, people are automatically upgraded to the next plan – and earnings remain healthy.
  6. The Telstra vs Optus legal controversy – In January this year, Optus launched an ad campaign, stating that there was only a 0.8% of difference between its coverage in Australia and that of Telstra (98.5% vs 99.3%). Telstra moved to court, pointing out that there was the factor of geographical difference in areas served (which was quite considerable). The final ruling (at a Victorian Court, by Justice James Elliot) was hailed by Telstra, termed as ‘disappointing’ by Optus – and made sure that an extra bit of spice was added to their rivalry.
  7. User-satisfaction levels – Telstra aces this round in a canter. According to customer surveys across Australia, there is an impressive 87%  user-satisfaction among people who use its services. Optus offers a 66% satisfaction rate on average – which is lower than even that of Virgin Mobile. The number of user-complaints is around 3% higher for Optus too. Vodafone Australia, with a user-satisfaction count of just over 35%, is at the bottom of the pile among the major players in the mobile market Down Under.
  8. Building a loyal customer-base – Both Telstra and Optus are on a mission to prevent their Australian users from switching over to their rival’s services. Recently, Telstra launched a ‘Thanks Programme’ – via which it has started giving away concert and movie tickets to its subscribers, either free or at heavily subsidized rates. Optus, on its part, has a Frequent Flyer Points distribution scheme. It is particularly of value for those who have a Qantas account and have plans to buy a new handset. However, many mobile app developers and analysts feel that there are too many of these Flyer Point locations.
  9. Network speed and availability – You might experience network connectivity issues on Vodafone, find that the Optus network has slowed down at times – but problems of this sort are practically unheard of for Telstra-users. Particularly along the eastern coast of the country, Optus and Vodafone do not offer 3G mobile web browsing options – something that Telstra does. It’s not surprising that users who require fast and uninterrupted mobile data network coverage (and do not mind paying a bit more for that) find Telstra the best option.
  10. Will Telstra remain the market leader? – There are two schools of thought regarding this. Some mobile software and app analysts feel that Telstra’s overwhelming market dominance in Australia is gradually destroying the competition domestically. The figures, however, suggest a different scenario. Telstra used to have nearly 80% device share in the first few years of this century, which has been nearly halved (despite a rise in the ABSOLUTE number of users) at present. It remains to be seen whether Optus can find a way to overtake Telstra within the next decade or so.

In terms of customer servicing, Telstra and Optus are more or less at par (WhatPhone reports a 4% edge for Optus on this count). Interestingly, Roy Morgan ranks the services of both these companies below Virgin Mobile. With a total smartphone user count in excess of 16 million, Australia is in the midst of a white hot mobile revolution – it will be interesting to find whether Telstra or Optus finally comes out as the top service provider company.