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Telecom CPI Residential Line Price Increase


Telecom has announced an annual Consumers Price Index (CPI) increase of between $1.05 and $1.25 for monthly residential line rental.

Customers will see the increases in their February 2003 accounts.

The price for HomeLine (or monthly residential line rental) will increase from $38.05 to $39.30 including GST – an increase of $1.25 – in line with the CPI. Homeline rentals in the Wellington 04 calling area, and Christchurch and most of its suburbs, will rise from $31.35 to $32.40 – an increase of $1.05.

Group Marketing Manager Consumer Sandra Geange said although local calling was continuing to increase dramatically because of free calling to the Internet, Telecom was constrained under the Telecommunications Service Obligation (TSO) as to how it could recover the cost involved.

“Under the TSO, or Kiwi Share, the only way we can recover some of the costs involved is through this moderate increase in monthly line rental in line with the CPI.

“Approximately 80% of free local calling volume is made up of free dial-up Internet usage, which is ever increasing. This situation continues to drive up the cost to Telecom of providing this service.

“We’ve spent approximately $120 million on the network in the past four years just to support free local calling and dial-up Internet, and will continue to make significant investments in this area.”

Ms Geange said the amount of local calling Telecom customers make has more than doubled compared to five years ago.

“Back in 1997, residential customers were spending an average of 640 minutes a month making local calls, and paying a Homeline rental price of $35.87 a month.

“From 1 February 2003, the majority will be paying $39.30 a month while today, residential customers spend on average more than double the time they were spending in 1997 making local calls – an average of 1412 minutes a month.”

Ms Geange said customers could switch to a number of Telecom packages that combine Telecom HomeLine with additional services.

“These packages – JetLine, MessageLine and SmartLine – give customers the opportunity to customise the range of services they buy from Telecom. They also offer excellent value for money.”


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