$10 extra if not in main centres

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clod

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#111705 12-Nov-2012 17:38

Whats the justification nowadays for Telecom and other isp's to charge an extra $10 if you dont live in a city. Are they not worried about customers outside the centres because theres not enough of them? Dont they do all their help etc thru the phone lines or internet so theres no difference where you live? What happened to competition?

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#715966 12-Nov-2012 17:41

I have moved this to the generic forum because this is not only with Telecom New Zealand.

Rural customers have different pricing because the infrastructure, which is NOT provide by the telcos or ISPs cost more to deliver over large areas with sparse population.

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#715983 12-Nov-2012 18:05

It's outside the main centres isn't it, so it's not 'traditional' rural as in farms etc, but also any city that's not one of the major 3.

johnr

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#715985 12-Nov-2012 18:11

Costs more to serve these customers just like petrol costs more in rural areas

Compare a acre of land cost rural to the city! Do you hear us city folk complaining it's a life style choice

John

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#715991 12-Nov-2012 18:15

It's very simple really. A standard POTS phoneline costs less in Auckland, Wellington and Christchurch than it does everywhere else in NZ. This cost is passed on to customers if you have a phone+internet.

If you have a naked connection the wholesale naked cost is now the same right across the whole country.

These prices are regulated by the Commerce Commission. If you take issue with this pricing they're the people to contact.

mattwnz

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#715998 12-Nov-2012 18:39

sbiddle: It's very simple really. A standard POTS phoneline costs less in Auckland, Wellington and Christchurch than it does everywhere else in NZ. This cost is passed on to customers if you have a phone+internet.

If you have a naked connection the wholesale naked cost is now the same right across the whole country.

These prices are regulated by the Commerce Commission. If you take issue with this pricing they're the people to contact.

I thought it was a legacy cost, after Saturn started offering cheaper monthly phoneline rental to those people in fibre optic cable areas in Wellington, Auckland and Christchurch in the late 90's/early 2000's. These were the only areas in NZ that had a total competing network installed. So telecom also reduced peoples phone line pricing in those areas by $10 to match Saturns pricing, so they didn't lose customers. I recall this because we were about to switch to Saturn, but then telecom matched their pricing by reducing the cost by $10, so I didn't switch.

freitasm

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#716001 12-Nov-2012 18:48

As I said, and sbiddle confirmed. Different costs...

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clod

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#716003 12-Nov-2012 18:53

Yes mattwnz, that is what I understood as well. Possibly a case of that being forgotten and a whole new set of reasons made up to justify the extra profit. I love the rural justification, does that mean any one outside of Auckland, Wellington and Christchurch must live on a farm? Its interesting that in this age of so called competition none of the isp's seem to want to remove it.

freitasm

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#716007 12-Nov-2012 18:54

Read sbiddle's answer again. The price for infrastructure is set by Commerce Commission, managed by Chorus. It's not a Telecom, Vodafone or TelstraClear thing.

Now that this is out of the way, you can stop talking about "a whole new set of reasons made up to justify the extra profit" because the money does not stay with the operators.

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old3eyes

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#716017 12-Nov-2012 19:28

johnr: Costs more to serve these customers just like petrol costs more in rural areas

Compare a acre of land cost rural to the city! Do you hear us city folk complaining it's a life style choice

John

Really. I would have thought that servicing a place like Tauranga which is far more compact that Auckland would be cheaper to support. You can travel from one side to the other on 30 minutes or less compared to Auckland. Wellington and Christchurch were originally cheaper with Telecom because of TelstraClear also had a competitive fone service. These days it should be one cost for all metro areas.. Rural country is a different story. It does cost way more to deploy and service..

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Old3eyes

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#716022 12-Nov-2012 19:35

old3eyes: These days it should be one cost for all metro areas..

I *think* that UFB is the same price nationwide, so if I'm correct then we're getting there :)

clod

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#716024 12-Nov-2012 19:36

Comment by techremarks, on 3-Apr-2006 22:58

Amazing what competition can do... Another \"old\" example, Telecom charges $42.40 for line rental in Auckland, but only $34.80 in Wellington and Christchurch where TelstraClear has coverage. (They charge $31.95.)

This is from http://juha.saarinen.org/271

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#716030 12-Nov-2012 19:37

That was back then, when the telcos set the prices and Telecom owned the infrastructure.

Copper prices are now set by the Commerce Commission, Telecom doesn't own the copper, doesn't have any interest on Chorus, so things are very different from six years ago.

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#716032 12-Nov-2012 19:39

freitasm: That was back then, when the telcos set the prices and Telecom owned the infrastructure.

Copper prices are now set by the Commerce Commission, Telecom doesn't own the copper, doesn't have any interest on Chorus, so things are very different from six years ago.

Did the ComCom actually decide on the prices independently, or by using the old Telecom prices as a starting point?

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#716044 12-Nov-2012 19:49

A lot has changed since 2006

raytaylor

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#716058 12-Nov-2012 20:29

old3eyes:

Really. I would have thought that servicing a place like Tauranga which is far more compact that Auckland would be cheaper to support.

Part of Telecom's obligations under the kiwishare? agreement is that
- Telecom (or whoever owns the PSTN now) may only raise the price of a landline by the cost of living increase each year
- The price must be the same for urban and rural customers.

This relates to the POTS telephone component of the cost, not the broadband component. Nothing to do with broadband.

When VodaTelstraClearSaturn started offering landlines in areas served by their cable network in the late 90's, they were priced cheaper than Telecom.

Telecom couldnt lower their price to match without lowering the price nationwide because of their kiwishare? obligations.

So they asked the commerce commission if they could lower the price in those specific areas where saturn/clear were operating their cable network, and the commerce commission said Yes.

Roll forward 5-10 years and we now have multiple ISP's (including telecom) wholesaling those same lines that qualified for the lower pricing in auckland, wellington and christchurch

It doesnt really cost less to serve a place like tauraunga because it is more compact, it just means less profit is made in per line in the big cities than they do anywhere else in the country.

One interesting thing you see is
- VodaTelstraClear sell lines on their cable network at the lower price
- VodaTelstraClear also wholesale chorus lines that qualify for the approved discounted pricing and pass on their saving to their customers in those areas, and sell at the normal rate (because it costs them more) in other areas.

The discounted pricing only applies to approved suburbs in the Auckland, wellington and chch areas that the commerce commission has signed off on, and where the competing cable network operates.

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