There have been two major changes to the charges ISPs pay to suppliers recently. Flip and the rest of the telco industry didn’t expect either price rise, but they have arrived and massively impact the industry.
As a result, our prices for standard and VDSL broadband customers will increase $4.95 a month in 2016.
The first change that has caused prices to rise is the Telecommunications Development Levy.
That Levy is a fee telcos and ISPs must make to the Government. The Government then invests in things like rural infrastructure, rural broadband and fixing rural cellphone blackspots.
The industry expected the levy to decrease, but instead, the government extended it. As a result, we have needed to pass this fee onto customers. It forms part of the increase we are making in 2016.
All the major ISPs have already added the TDL charges to their bills.
The next change is the fee we pay to Chorus (the company who own all the copper phone lines in New Zealand) to use those lines.
These fees are set by the Commerce Commission. The Commerce Commission has decided to price this rental around $4 higher than the industry expected it to be set.
As a result, we have needed to change our prices for all ADSL and VDSL customers.
You will have received an email about your price rise, and when it will kick in.
We are also facing rising costs in a number of other areas such as bandwidth. Kiwis are doubling their data usage every 12-18 months.
As a business we never like putting prices up – so sorry about this – but we need to cover our increased costs.
While we’ll continue to work hard to keep prices low, when unexpected costs like this come along, we unfortunately have to pass them on.