Telstra has been forced to reduce forecasted income by $300 million because fewer customers than anticipated are ready to sign up to the National Broadband Network.

In a letter to shareholders, Telstra said delays in the rollout of the NBN means not as many Australians will be declared "Ready For Service" as previously expected.

This would lead to income reduced by $300 million for FY19, group earnings slashed by $100 million and one-off agreement receipt costs of $200 million.

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Telstra said delays in the rollout of the NBN means not as many Australians will be declared 'Ready For Service' as previously expected. (AAP)

As a result of the delayed rollout, Telstra's total income for FY19 is now estimated to be $28.1 billion, while earnings excluding restructuring costs will be reduced to $9.4 billion.

In the previous financial year, Telstra suffered an 8.9 percent drop in profit to $3.5 billion as competition around internet and phone plans heats up.

After the disappointing results Telstra's CEO Andrew Penn wrote to shareholders, informing them of how the telco was responding to a rapidly changing market.

"Companies are defined by how they respond in challenging times and there is no doubt Telstra, and the telecommunications industry globally, is operating in times of enormous challenge and change," wrote Penn.

"These challenges are not unique to Australia or to Telstra.

"However, a unique challenge we do have is the nbn network. This is having an enormous impact on our business – wholesale prices have risen, meaning we and other industry participants are facing a fixed-line market where reseller margins are rapidly reducing."

As well as dealing with the obstacle presented by the nbn, Telstra will soon have a new major competitor to shake up the current two-horse race it has with Optus.

A week ago Vodafone Australia and TPG Telecoms announced a $15 billion merger – pending regulatory approval – as a strategic move to cut directly into Telstra's bottom line.

"The Australian telecommunications market is characterised by the presence of Telstra and Optus.

Together, TPG and VHA will provide stronger competition in the market and greater choice for our Australian consumers and enterprises across fixed broadband and mobile," said Vodafone Australia CEO Inaki Berroeta.

"The big winners of this will be Australia's consumers, with the new company able to deliver even greater competition and value."