KEY POINTS:
Telecom is increasing its monthly line rental charges by up to $1.85 from March, the company announced today.
Telecom general manager consumer marketing Kevin Bowler said the line rental increases were based on a 3.5 per cent increase in the Consumer Price Index and reflected unavoidable cost increases across many areas of the business.
The biggest increase will be for subscribers to Anytime Plus in areas outside Auckland City, the Wellington region and Christchurch, who will see their charges increase by $1.85 to $56.80.
Mr Bowler said the cost of calling the 018 directory service from a mobile would also increase to 75 cents from March, but the cost from a landline would stay at 50 cents.
The price hike follows the introduction of the Telecommunications Amendment Act last month.
The Act forces Telecom to split into three divisions and pay the same price it charges its rivals for access to its network.
Telecom's chief financial officer, Marko Bogoievski predicted the split would cost the company up to $115 million a year.
Today's line rental charge rises are allowed under the Kiwi Share agreement, which says local line prices can be increased by the rate of inflation.
After news of the hike, the Telecommunications Users Association (Tuanz) described that provision as a "curious concession to a company that enjoys a very high degree of market power, operating in an industry where prices are trending down rather than up".
Tuanz said it was looking forward to the provision being opened up for debate in a review of the Kiwi Share which the Government had promised to initiate this year.
The association also commented on the lower levels of line rental charges in Wellington and Christchurch.
In those cities Telecom faced substantial competition, while in the rest of the country it did not, Tuanz chief executive Ernie Newman said.
Mr Bowler said that it was "the case to some degree" that the rest of the country was subsidising line rental rates in those two cities.
That was because some of Telecom's competitors had chosen to build regional, rather than national, networks and attack Telecom in those regional centres, Mr Bowler said.
Telecom had needed to respond in those centres, and line rental charges had been different for some time.
He expected that in time competition, and the types of plans Telecom was introducing, would result in more even pricing across the market.
In 2004, New Zealand had the third most expensive residential tariffs out of a survey of 30 OECD countries. Only Hungarian and Czech consumers were paying more than New Zealanders in fixed residential costs.
Price increases
HomeLine in the Wellington 04 calling region and Christchurch city and most suburbs
From $34.80 to $36.00
HomeLine in all other areas
From $42.20 to $43.60
Second HomeLine in the Wellington 04 calling region and Christchurch city and most suburbs & Secondline - HomeLine Special
From $31.70 to $32.70
Secondline - HomeLine Standard
From $38.50 to $39.80
Anytime in the Auckland City, Wellington 04 calling region and Christchurch city and most suburbs
From $39.85 $41.20
Anytime in all other areas
From $44.95 to $51.60
Anytime Plus in the Auckland City, Wellington 04 calling region and Christchurch city and most suburbs
From $49.95 to $51.60
Anytime Plus in all other areas
From $54.95 to $56.80
Two on 1 package
From $38.05 to $39.30
- NZHERALD STAFF / NZPA
