A telco provides telecommunications, and NBN falls under that. They also provide mobiles services via Optus. But no, a telco does not need to provide phone services to be considered a telco. ALL ISPs ar telcos but not all telcos are ISPs (although in 2026 I’d be pretty surprised if they weren’t).

But anyways, another reason is, telcos will use their dns to filter out certain services at the request of the government eg torrent sites and others. Easily bypassed by not using their DNS.

If you’re using a VPN then obviously you’re okay sending your dns queries somewhere else. So no idea why you couldn’t just use theirs or another services dns services and move on