Telecom is increasing its prices for home line rentals, and admits those in three main centres receive a cheaper rate - up to $7 a month - than everyone else.
But the company denies this is because of competition in Auckland, Wellington and Christchurch, saying Telecom could share its costs more widely because more customers were in these centres.
Telecom general manager of consumer marketing David Craig, of Auckland, said economies of scale was the main reason bill-payers in Otago and Southland could pay more than $7 a month more than a telephone user in Wellington, or Christchurch, and more than $5 a month than in Auckland.
Telecom was raising its price across the country for customers on homeline and anytime plans, with the average customer likely to pay $1.50 more a month, an increase of about 3%.
The company said the price increase reflected the impact of inflation, and other rising costs. Prices were reviewed annually and the increase would be from May 1. Business customers would not be affected at this stage apart from a 15c rise in their wire maintenance contract.
The price for business customers would be reviewed later. Most residential customers were on the anytime or homeline plan.
Mr Craig said the market was competitive throughout, and regional price variations had nothing to do with a lack of competition.
‘‘These differences have been around for a while and with more customers in the big cities [they] can share the cost.''
He said if a centre such as Queenstown or Dunedin grew sufficiently, Telecom might look at reducing prices, but the mar ket was changing so quickly anything was possible.
The company was always offering promotions to cus tomers and targeting different sectors of the market.
He also said there was not a swing away from land-line phones to mobiles, as people wanted to keep the security of a land line.
