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Revised Telecom Connection Charges

Revised Telecom Connection Charges

Telecom has changed the price structure for new connections and reconnections.

The first change relates to customers seeking reconnections. Until now, reconnections were charged at different levels depending on their circumstances. The prices have now been simplified, resulting in a reduction for about 125,000 reconnecting customers annually who will now pay $39.99 instead of $61.88.

The other changes, affecting smaller numbers of customers, are for new connections. Telecom carries out about 16,000 new connections each year.

The new connection charge is a one-off that occurs when people build a new home, move house or require a second line where no phone connection previously existed.

Telecom Chief Operating Officer New Zealand Simon Moutter, said the historic price charged for new connections bore no relation to the actual costs.

“This move is about customers who live in areas where the cost of providing telecommunication services is high, making a greater contribution to the total cost of providing that service.

“Among the 16,000 new connections a year, about 78% of customers will now pay $95 and about 11% will be charged $250. Between 1000 and 2000 customers will be asked to make an approximately one third contribution to the cost of their new connection.”

Mr Moutter said making the economics of new connections more realistic will enable Telecom to invest sooner to meet new demand.

“As a result, it’s likely that over time we’ll be able to reduce the small number of customers who have to wait for a connection.

“The new pricing structure also brings us into line with, for example, power and gas companies which have different rates for new connections depending on the work involved in connecting the particular customer, distance of the customer from existing services, and number of customers using the infrastructure.”

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