What does Telstra's purchase of Boost mean for the Australian telco landscape?

Alex Choros - Managing Editor + Group Telco Editor

Last updated 05 December 2024

It's been three days since Telstra announced it would be acquiring its MVNO partner Boost Mobile in a deal said to be worth as much as $140 million. Naturally, there are big questions about what this means for the local telco market.

To start, I don't think Telstra's purchase will significantly change competition in the mobile space. While consolidation can have negative impacts, Telstra was already responsible for Boost Mobile's pricing and product roadmap. Boost mobile plans may be cheaper than Telstra but - by and large - they're more expensive than what truly independent Telstra MVNOs have been charging.

This also means Telstra doesn't have much incentive to change unique selling points like the fact Boost is the only MVNO with access to the full Telstra network. Every other Telstra-powered provider uses a slightly smaller footprint which means they have less coverage in regional and rural Australia.

If that advantage goes away but Boost's pricing stays where it is, there's less of a reason for customers to stick with Boost. That would be bad for Telstra, as the customer base is likely the main reason it purchased Boost. The telco industry in Australia is very mature, and mergers and acquisitions are the only way to significantly grow a business.

It becomes a bit harder to predict what might happen outside of the mobile space. Boost was planning to start selling NBN plans this year, which is something that has yet to occur. Rather than partner with Telstra, Boost was working with a different wholesaler for its NBN offering.

In addition, Boost Mobile founder Peter Adderton told WhistleOut earlier in the year that Boost Broadband would use technology similar to MobileX - his AI-driven telco in the US - to dynamically give users the speeds they need.

While Boost may end up selling NBN plans under Telstra, it is likely they'll take a very different form. There's no reason for Telstra to work with a third-party wholesaler for NBN plans when it already is one, and Adderton has confirmed that he is no longer involved with Boost following the sale.

A Telstra spokesperson told WhistleOut they can't currently comment on future products.

Similarly, there's a question mark over Boost Mobile's refurbished phone offering - another business unit that was run independently of Telstra. While it's not Boost itself selling refurbished devices - it partners with refurbished Alegre who handles the logistics - the fact the devices are on the Boost site makes them more accessible. It may highlight the option to those that don't even know it exists.

Telstra's budget brand Belong used to offer refurbished devices through its "Second Life Shop", but no longer does. I asked Telstra for comment about Boost's refurb business, but didn't hear back in time for publication.

All in all, Telstra's acquisition of Boost feels like it will have a negligible impact on competition in the mobile space, but leave the MVNO more constrained in other areas. I'd love to be wrong, but it's hard to imagine Boost trying new things under Telstra.

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Alex Choros

Managing Editor + Group Telco Editor | X | Instagram | Threads | LinkedIn

Alex Choros is the Managing Editor of WhistleOut Australia and an award-winning journalist. He's been writing about consumer technology for over a decade and is an expert on the Australian telco sector, to the point where he knows far too many phone and internet plans by heart. In addition to leading the WhistleOut editorial team, Alex is responsible for ruining the office Sonos with his troubled taste in music.

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