According to the report, this increased market competitiveness has also impacted the lower end of the market.

"The other standouts were iiNet and TPG; both are impacting the market," he said.

"Telsyte view them as strong participants focusing on bundles and utilising unconditional local loop service [ULLS] and their own infrastructure to enhance the profitability of their businesses."

Coughlan added that it was becoming increasingly difficult for wholesale-based DSL providers to compete against Telstra retail and the larger unconditional local loop service providers such as iiNet and TPG.

"We believe subscriber numbers in this segment of the market has contracted by 8.2 per cent in the last year," he said.