Complaints to the telecommunication industry ombudsman have increased for the second year in a row as more suburbs switch over to the national broadband network.

However the proportion of complaints per residences on the network has trended down, with complaints per 1,000 premises added to the NBN decreasing from 4.1 to 3.2 in the first half of 2018.

The ombudsman received 167,831 complaints in the the 2017-18 financial year, an increase of 6.2% in the previous year, according to its annual report released on Wednesday.

NBN Co agreed to pay internet providers a $25 rebate for late connections and other faults as part of an ongoing review by the Australian Competition and Consumer Commission (ACCC), which launched an inquiry last year following a high number of complaints to the ombudsman’s office in the 2016-17 financial year.

Complaints against most retail service providers had fallen, but the Optus Group, which includes Virgin and accounts for 20.9% of total complaints, increased by 35%.

Almost half of all complaints in 2017-18 related to connection or service quality issues or switching to a new provider with the majority of complaints in that category about services delivered by the NBN.

Despite the continued increase in complaints about the network, ombudsman Judi Jones said service quality had improved overall, and complaints had trended down in the last quarter.

“As it takes over as the dominant network it will have an increasing proportion of our complaints, that is simply a fact,” Jones told Guardian Australia.

One in four complaints related to a service provided by the NBN.

However she said that most of those complaints were due to faults of retailers, not the NBN itself.

The office received 25,047 complaints about issues around changing providers, of which 58.2%, or 14,589, related to the NBN.

It received 57,289 complaints about service quality or speed, of which 27,000, or 47.7%, related to the NBN.

Just over 87% of complaints were from residential customers. One third concerned a failure of service providers to act to resolve phone or internet issues; one quarter concerned disputed fees or charges, and an eighth complained that they had no internet connection or dial tone at all.

Jones said she was among those who had become dissatisfied with her internet speed in the past year after she downloaded an app which allowed her to check her service in real time.

“Occasionally Netflix would hang, but most of the time I was happy with the quality of the service,” she said. “But I downloaded an app and I can check the speed, and I will see that I have six megabits per second (Mbps) in downloads and occasionally only 1Mbps uploads, and I find I am much less happy.”

The number of complaints decreased in the second half of the year despite an uptick in the number of residences connected to the NBN, which as of June 2018 passed the halfway mark of its rollout with more than 4m premises connected.

“We are expecting to see complaints continue to fall,” Jones said.

The Australian Communications Consumer Action Network (ACCAN) said it welcomed the slowed rate of complaints but was frustrated that new regulatory measures to protect consumers had not been in place from the start of the rollout.

New measures include retail telecommunications being ordered to refund tens of thousands of customers who were sold high-speed plans on the NBN in areas where that speed could not be delivered and mandatory testing to ensure a line is active and at the correct speed before contractors move on.

“It is pretty clear to us that the market on its own will not provide good customer service,” ACCAN chief executive Teresa Corbin said.