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Telecom backs down on rural connection charges


Friday 22nd November 2002

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Telecom has announced a reduced pricing structure for new connections in rural areas.

The top fee for a new connection will be $500, down from the $1500 or more originally planned by the company.

"We've been talking to a lot of people over the past few days. As a result of all the feedback, we've had a rethink about the 1000 to 2000 customers who were most affected by the changes," Telecom chief executive Theresa Gattung said today.

Communications Minister Paul Swain, Industry and Regional Development Minister Jim Anderton and Rural Affairs Minister Jim Sutton have welcomed the change.

"The improved charging regime will go some way towards addressing the concerns of rural people.

"Telecom has also agreed to give people on low incomes the opportunity to seek a further reduction in new charges through a budget advisory service," the ministers said in a statement.

Ms Gattung said customers who could not afford the new standard connection fee would pay just $95.

"That assessment will be made by a respected independent organisation," Ms Gattung said.

"We've been prepared to be flexible and find a way to address these concerns. At the same time people have recognised that it's legitimate for us to be able to recover some of our costs," she said.

Under the new pricing structure, people in areas with fewer than 1000 people will pay a new connection fee of $500.
"They would have been paying $1500, $3000 or more under what was planned," Telecom spokesman John Goulter said.

Connection fees for other areas remain unchanged from the original plan. In centres with 1000 to 10,000 people, a connection will cost $250, and a new connection in centres with more than 10,000 will cost $95.

Mr Goulter said that in areas where Telecom would have to extend its network to allow a connection with a new customer, the customer would have to pay one-third of the actual cost.

He said Telecom would deal with up to 120 of these high cost new connections each year.

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