The biggest Australian telco stories of 2017

Telstra cuts remuneration for Vita Group

Telstra's only master reseller partner – Vita Group – had a turbulent year, when Telstra revealed its intent to cut remuneration for partners.

Telstra will gradually cut remuneration for stores by 30 percent over the next three years in addition to cuts Vita already agreed to at the beginning of 2017. Vita was immediately hit with a five percent drop in like-for-like revenue despite revenue from its retail channel up two percent in FY17.

In exchange for the remuneration cuts, Vita revised its master license agreement with Telstra allowing it to increase its store footprint from 105 to 110 stores. Vita's shares dropped from a high of $3.65 in March prior to the announcement to a low of 86 cents in May. Shares are currently trading at $1.32 at the time of writing.

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Vocus hit with class action

Following a year of plummeting shares, Vocus was hit with a class action suit by shareholders over allegedly "misleading and deceptive conduct" in September.

The group, led by law firm Slater & Gordon and shareholder claim management provider Investor Claim Partner (ICP), claim that the company overstated its guidance for FY17 as it worked to integrate Amcom and Nextgen Networks and to merge with M2 Group.

In May, Vocus revised its forecast revenue down from $1.9 billion to $1.8 billion, and EBITDA from $430-450 million to $365-375 million.

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Telco complaints reach four-year high

The Telecommunications Industry Ombudsman released a damning report in October showing that the number of complaints about telco services had hit a four-year-high in 2017.

The TIO received 158,016 complaints this year, the highest number of complaints since 2012-13. The most common complaints came from customer service, followed by billing and payments, faults and complaint handling, with internet services making up the majority of complaints.

The report also showed that complaints about NBN servers were up 159.3 percent, while the number active premises doubled to 2.4 million in that same time.

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Telstra cuts 1400 staff, restructures business

Telstra revealed a sweeping organisational restructure, including 1400 job cuts over a six-month period across the entire business.

Chief executive Andrew Penn said the restructure was "urgently" needed to slim down the business and plug a $2-3 billion earnings gap left in the wake of the construction of the NBN.

The biggest changes came in consolidating the company's various business units to focus on four key areas – networks, NBN and commercial delivery, IT and digital solutions, and customer management.

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TPG becomes Australia's fourth network operator

TPG turned heads when it acquired a lot of 700Mhz for $1.26 billion in preparation to become Australia's fourth mobile network operator, taking on Telstra, Optus and Vodafone.

The telco announced plans to invest another $2 billion in building its own network to cover 80 percent of the population. TPG already resells its mobile services on Vodafone’s portion of the network, though a TPG spokesperson said the company had no plans to change its MVNO arrangement in the near future.

TPG's network is expected to open sometime in 2018.

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Telstra takes mobile crown in every capital city…except one

A report from Roy Morgan was released in February showing that Telstra has the largest market share in all of Australia's capital cities…except one.

The report showed that Vodafone was actually the most popular mobile provider in Sydney, the largest city in Australia, with 30.4 percent share compared to Telstra's 27.9 percent and Optus' 26.5 percent.

Telstra still maintained 43.6 percent market share across all five capital cities, followed by Optus with 24.1 percent and Vodafone with 18 percent.

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Telcos race to cheapest data plans

Telcos continued to offer up new internet plans, either aiming for bigger data allowances for cheaper prices.

Some notable inclusions were Aldi offering a year's worth of calls, texts and 42 GB for $249, Vaya offering 70 GB for $65 a month, Optus' SMB plans with 100 GB per month for $160, Ovo Mobile's 100 GB plan for $100 per month, Belong's first mobile plan with 5 GB of data for $25 per month, and Moose Mobile with 500 MB for $8 per month.

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ACCC says Telstra doesn't have to open up mobile network

In a big win for Telstra, the Australian Competition and Consumer Commission officially decided not to force network operators to let competitors 'piggy-back' on their regional networks.

The competition watchdog instead identified a number of measures to improve regional mobile coverage, such as better transparency about network coverage and quality, and more accountability on network investments.

Not happy with the decision, Vodafone said it would take the ACCC to the court over the decision, saying the determination process was flawed.

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Big three hit by mobile termination rate ruling

Australia's three biggest telcos all pinned their sagging financials on an industry-wide mandate by the Australian Competition and Consumer Commission that imposed a reduction in maximum mobile call and SMS termination charges last year.

Optus said it expected to lose up to $800 million in revenue FY17 from the change and Telstra said it lost $400 million in revenue. Vodafone didn't give an exact figure, but said its $150 million drop in revenue was "driven entirely" by the mandate.

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Liquidators chase SoleNet, Sure Telecom for $2 million debt

A group of companies run by SoleNet and Sure Telecom's owner were wound up in July, with liquidators chasing up to $2 million in debts.

The liquidators alleged that unlawful phoenixing activity took place when customers were traded between a number of companies from 2013 and 2014 to avoid regulatory sanctions and debts. The company's director was fined $250,000 in March and was banned from running a corporation for three years.

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