"However, if the Coalition wins power in 2013, we expect the new government will stall the National Broadband Network [NBN] while it goes through the and policy reviews for the initial term of government."

Coughlan added that if this happened, the market would swing back to DSL and optical fibre would only be connected to approximately 700,000 premises by the end of 2017.

"The fixed broadband market growth has slowed to 3.8 per cent, from over 20 per cent in 2007, resulting in increased industry rivalry as participants move to capture subscribers from each other," he said.

"This trend is further exacerbated by the rollout of the NBN, as there will be an advantage to incumbency when it comes time for customers to move to the new network."

According to the report, in the last 12 months the dominant market participant, Telstra, has shown renewed aggression in the market, with increased download limits, lower prices and bundles that the market is finding attractive, resulting in a market turnaround; the 1 per cent decline in customers has improved to 7 per cent growth in the last year.