RealTime IT News

Telstra Hits Luddites With Increased Rental

Telstra has announced line rental increases of 15 percent as of February, but there may be an escape clause for tech savvy early adopters.

The rental increase has been delivered with a sweetener, under the title of "new prices and options". Online types can escape line rental and even make cheaper local calls by agreeing to forgo paper bills and make all their payments online or over the phone.

Customers signing up for the new HomeLine Net service will be charged up to $5 less per month for rentals and a flat 19 cent rate for local calls, and receive all their bills over the Internet.

The plan has met with criticism from community members, who compared it to the banks' bid to move their customer base to ATM and Internet banking use. Concerns have been raised that the pricing system will penalise consumers belonging to a lower socio-economic bracket, who can least afford increased line rental.

The majority of customers will now be charged up to $19.50 for line rental, while HomeLine Net customers may pay as little as $14.50. Net customers who wish to receive a paper version of their bills will pay $3.50 per hardcopy. Telstra claimed the line rental increase was a pro-competition move which was endorsed by the ACCC.

"The ACCC recently calculated the actual cost of providing customers with a line to our network to be around $31.70 per month, more than double what we currently charge. They also recently suggested line rental charges at current levels discourage competition in our industry and push up phone call charges," said Telstra retail general manager, corporate relations, Michael Herskope. Herskope said the current pricing of line rental resulted in an annual shortfall to Telstra of over $1 billion.

Telstra's major competitor, Cable & Wireless Optus said it was still absorbing the news. A representative said the company had no plans to announce a similar e-billing initiative, pointing to the recent sale of its Web-focused subsidiary Dingo Blue.

While online payment of bills, particularly via BPAY, has taken off in Australia, the online presentment being pushed by Telstra and e-billing providers such as e-BILL has seen slow uptake. BPAY is currently developing an electronic billing and presentment hub which would see consumers receive and pay bills via their bank's Web site.

Market research from e-BILL backer HPA identified a definite market for electronic billing services amongst people who already do their banking, share trading or shopping online. According to Ahmad Racheha, national manager for e-commerce at HPA, online presentment will only take off through the support of billers such as Telstra. "Just like the banks have driven consumer uptake for online banking, billers will need to push electronic payment of their invoices. The more billers you have delivering electronic bills the more compelling the service becomes to consumers and in return, there are greater benefits for billers," Racheha said.