That's according to the competition watchdog's first report on Telstra's compliance with its Structural Separation Undertaking (SSU) in relation to the break up of the telco and transfer of assets to the NBN.
The Australian Competition and Consumer Commission (ACCC) report found that Telstra primarily breached its obligations to safeguard 'Protected Information'. Commercially sensitive information about its wholesale customers seeped into its retail business.
Telstra wholesale customers include iiNet, Optus and TPG.
This information is provided to Telstra in its capacity as wholesale access provider. The breaches were found to have occurred between between 6 March - June 30 2012.
This could endanger competition as Telstra competes with its wholesale customers to provide end-user broadband services.
"These breaches arose as Telstra operates shared information systems that support both its retail and network functions, and access controls to those systems....were not adequate," the report states.
The ACCC has sought to stop the conduct and minimise the detriment to Telstra's wholesale customers.
Telstra, which self-reports any potential breaches, says it has taken steps to ensure compliance with its SSU obligations.
However, it will take some time to complete these tasks and requires changes to complex information and operational systems.
"While it is of concern that these breaches have occurred, the fact that these matters are now coming to light and are being addressed shows that the SSU is working," ACCC Chairman Rod Sims said.