Australia’s telecom expansion still paying for NBN policy mistakes

Despite rising data use and network growth, structural flaws in the NBN continue to shape affordability, competition and Australia’s long-term digital resilience, writes Paul Budde.

AUSTRALIA’S TELECOMMUNICATIONS sector is often presented as a success story: near-universal internet access, rising data use, expanding mobile networks and steadily improving broadband speeds.

The Australian Communications and Media Authority (ACMA)’s Trends and developments in telecommunications 2024–25 report broadly supports that narrative.

But the same report also exposes a harder truth. While technology and consumer behaviour continue to advance, Australia remains constrained by structural decisions made more than a decade ago — decisions that still shape affordability, performance, resilience and national interest outcomes.

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A data-driven economy on a compromised foundation

Australians now consume extraordinary volumes of data. In just three months to June 2025, around 13.6 million terabytes were downloaded across broadband and mobile networks, with the NBN carrying about 85 per cent of that traffic. This matters because it confirms what policymakers still too often downplay: fixed broadband is not a legacy service — it is core economic infrastructure.

Yet despite relentless growth in demand, the most common NBN speed tier remains 50 megabits per second. Higher-speed plans are increasingly available, but mass uptake remains limited. This is not due to a lack of digital ambition. It reflects wholesale pricing signals, retail complexity and the long tail of constraints created by the multi-technology mix.

This outcome was predictable. From the moment the original all-fibre NBN vision was diluted into a patchwork built around copper and hybrid fibre-coaxial, Australia set itself up to pay twice: once to build a compromised network and again to remediate it. Ongoing migration from fibre-to-the-node to fibre-to-the-premises confirms that reality.

Fibre is only now becoming the dominant fixed-line technology — more than a decade late.

Wireless growth does not replace fibre

The report highlights strong growth in 5G, fixed wireless and satellite services. These technologies are essential, particularly for regional and remote Australia. But they are too often framed as substitutes for robust fixed infrastructure. They are not.

5G rollout remains concentrated in major cities. Fixed wireless is valuable but constrained by spectrum, contention and geography. Satellite services – whether Starlink, Project Kuiper or direct-to-mobile offerings – can dramatically improve coverage, but they are not designed to carry the core load of a dense, data-intensive economy.

The key point is frequently overlooked: wireless depends on fibre far more than fibre depends on wireless. The more “wireless” Australia becomes, the more it relies on fibre backhaul, interconnection capacity and network engineering discipline. Treating these technologies as interchangeable continues to produce flawed policy assumptions.

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Competition shaped by structure, not choice

The report also reveals where competition actually occurs. Smaller providers dominate the highest-speed NBN tiers, while major players retain control of mainstream services. Competition exists, but it is channelled into narrow lanes defined by wholesale pricing and infrastructure design.

Revenue trends reinforce the familiar pattern. Telstra, Optus and TPG remain structurally dominant in mobile infrastructure and the market shares of challengers grow extremely slowly by targeting enterprise and high-speed niches.

This raises a question Australia has avoided for too long: what is the telecommunications market for? Is it primarily designed to maximise shareholder returns, or to maximise national productivity, resilience and long-term economic capacity?

I have long argued that the NBN should never have been framed as a commercial profit centre. Its real returns are economy-wide: productivity gains, social inclusion, digital service delivery and competitiveness in a software-driven world. The report supports this indirectly. Data volumes continue to rise, but growth rates are slowing — not because connectivity matters less, but because its value has shifted from consumption to dependency.

AI, energy and the next blind spot

The report also points to the next strategic challenge: artificial intelligence. Telcos are embedding AI into networks, operations and customer services, increasingly via partnerships with global hyperscalers.

This raises two underexamined risks. First, AI-driven networks increase energy demand at a time when Australia’s electricity system is already under strain. Second, deeper reliance on offshore cloud and AI platforms erodes digital sovereignty just as data security and geopolitical volatility are becoming defining constraints.

The conclusion policymakers keep delaying

The report paints a sector that is technologically advanced, heavily used and commercially active. But it also confirms Australia is still paying for past compromises.

We are upgrading a network that should never have required this level of remediation, celebrating wireless growth while underestimating the centrality of fibre, and adopting AI without an integrated strategy linking telecommunications, energy and national interest.

Australia does not need another round of incremental fixes. It needs a renewed telecommunications vision — one that treats digital infrastructure as essential nation-building, not merely as a market to be tuned at the margins.

The evidence is clear. The remaining question is whether policymakers are prepared to act on it.

Paul Budde is an IA columnist and managing director of independent telecommunications research and consultancy, Paul Budde Consulting. You can follow Paul on Twitter @PaulBudde.

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