During Vodafone’s submission to the TSO conference, the company produced a spoiler to a long-standing myth — that Telecom boosts its line rental charge by as much as it can each year.
A graph sourced from the Ministry of Economic Development’s website shows that the cost of Telecom residential line rental in real terms has been dropping at an accelerating rate. The latest figure, for July, is $25.40 in November 1989 dollars, compared with the Kiwi Share price-cap of $27.80.
The graph led Commerce Commissioner Donal Curtin to express his surprise audibly. “I thought the line rental had increased with the CPI,” Curton said, giving voice to a popular myth that every time Telecom has re-rated line rental against the consumer price index, as it is entitled to do under the Kiwi Share agreement, it has taken as much as the CPI would allow.
Vodafone’s Peter Stiffe, who produced the graph, said Telecom has set line rentals lower still in Wellington and Christchurch, where it faces local loop competition.