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27 November 2014

Using separate telcos set to cost more

Price hike likely if you use separate companies.

If you’ve got your broadband and landline with different providers, you may be paying more for the privilege from 1 December. It’s estimated 20,000 consumers are likely to be affected by the change.

Why the price hike? Unhappy customers have been asking the same thing after receiving cryptic explanations from their broadband provider.

The reason for the rise stems from changes to the way telcos pay Chorus to access the copper line that brings broadband and landline (voice) services to your house.

From this month, broadband providers will pay Chorus for the costs of access to the line. That’s because broadband is now regarded as the primary product delivered by the copper network.

Telcos using the copper line to deliver broadband to a home that has landline services with another provider were previously paying $21.46 a month for line access. From 1 December, they’ll be paying $34.44. And they’re likely to pass on the costs to their customers.

Customers caught by the change should expect their landline bill to go down because their phone provider is no longer paying copper-line costs. But there’s no sign of a price drop. Spark has stated its not passing on cost reductions to affected customers.

As a result, it’s likely consumers who want to avoid a price hike will have to bundle their broadband and landline with one company. That’s what Spark is encouraging its customers to do.

If you’ve already got both services with one telco, price changes appear unlikely. That’s despite the overall copper price falling from $44.98 to $34.44 following an earlier Commerce Commission ruling. Telcos – citing competitive pressures – haven’t made any firm commitment to cutting residential rates.

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