Telstra market share slides as former PTT cancels NGN investment.

Rather like its stock price Telstra' share of the business IP services market continued to slide in the first half of 2006.

As the markets tee up for the Australian governments sell-off of 1/3rd of its remaining holdings in former PTT Telstra, BackChannels latest research shows that the G9 Consortium, led by Optus(Singtel) and Powertel continues to pile on the pressure at the high end.

With its market share amongst ASX200 companies slipping to just 30%, Telstra CEO Sol Trujilo must view data for the highly deregulated UK market with trepidation. Here former PTT British Telecom' share of the large business accounts is just 18.2%.

Remarkably for the market leading telco, the company has announced that it has cancelled investment in its Next Generation, or Fibre To The Node (NGN/FTTN) Network. Saying that it prefers instead to wait for the G9 consortium to roll out their own NGN and they will happily buy wholesale bandwidth from them. This could well be a political gambit aimed at reducing the pressure from the Australian regulator , which Telstra has increasingly blamed for its poor results claiming that meddling by the ACCC is impacting its ability to compete fairly.

For a developed country like Australia it is untenable to not have a NGN network spanning the country, and in reality it is unlikely that a consortium like the G9 would ever really be able to come together and roll out a national shared infrastructure, which leaves either the government (hmm, what do you think), or Telstra.

For the momnet it looks like a Mexican stand-off, but Telstra knows what all former PTTs know, ownership of the physical infrastructure. is key to long term survival in the Telco market and that owning the cables will always you give the upper hand.