Telecom cuts line rentals in Wellington and Christchurch

Telecom is dropping its monthly telephone line rentals for the first time in a decade - but only for Wellington and Christchurch customers.

The 18 per cent drop to $29.95 from $36.65 affects more than 500,000 of Telecom's 2.1 million customers.

Auckland, where Telecom has no competitor, misses out.

The move is designed to squeeze TelstraSaturn as the Australian rival sets up a state-of-the-art network in Christchurch and prepares to go live with part of it in about a month.

The $29.95 monthly rental matches TelstraSaturn's in Wellington, but the Australian competitor has not yet announced its pricing in Christchurch.