Credit Suisse telecoms and media equity research director Fraser McLeish downgraded his rating of Telstra to Underperform with a 12 month price target of $5.55 per share on the back of strong mobile handset results from Optus earlier this month.

If the investment bank's forecasts come true it will be bad news for Telstra's mobile division, which has been vital for balancing out falling earnings from its fixed-line services divisions.

"Competitive pressure in mobile continues to increase as Optus and Vodafone look to regain market share," he told clients in a note. "Optus reported 55,000 postpaid handheld additions in the three months to September versus Telstra's 72,000 in the six months to June.

"The current half could represent a significant turning point as Telstra's three-to-four year run of winning mobile market share comes to an end."

Telstra mobile service revenue in financial year 2015 would only grow by 0.6 per cent to $7.33 billion before falling by 1.3 per cent to $7.23 billion in financial year 2016, Mr McLeish predicted.

This will start hurting Telstra's net profits from FY16, but payments from the $11.2 billion deal with NBN Co will ramp up to $1 billion that year to soften the blow.

Mr McLeish said Telstra had been the main market winner over the past two to three years thanks to stable prices from its rivals, who were busily fixing their own networks and cutting costs.

Telstra dominates the mobile market with 16 million subscribers compared to the 9.4 million users with Optus and around 5 million at Vodafone Australia.

Credit Suisse believes Telstra makes 53 per cent of the mobile market's total revenue and that this will continue to grow during FY15 thanks to continued revenue decline at Vodafone Australia. But he warned the tide will turn during the 12 months ending June 30, 2016.

Pricing and network competition is now ramping up from Optus and Vodafone Australia, who have greatly improved their systems. The latter has lost two million subscribers over the past two years but the rate of decline has greatly slowed in the last few months.

"Telstra's bonus data offer meant that it is very competitive on the low to mid end plans," he said. "[But] Telstra pricing for higher data plans remain at a significant premium to its competitors.

"We see this high premium for larger data plans as a key risk area for Telstra, particularly as demand for data continues to grow [and] we expect that Telstra will have to address this by raising its data allowances further on its higher end plans."

He also said none of the telcos had a significant structural spectrum advantage or disadvantage. While Telstra has spent $1.3 billion to get the largest amount of new 700Mhz spectrum it also has the most customers to supply, which partly negates this advantage.

Over the past three years Optus has spent over $2 billion on its networks with the goal of catching Telstra by 2016 while Vodafone Australia has invested $3 billion.