Friday, 1 November 2013

The Landline Rip Off

Ok where to start?  Let's concede one fact.  The current systems used by Telecom and Vodafone have been around for about 25 years.  In that time land lines have largely given way to a proliferation in Cell use to an extent the land line is almost redundant.  Almost.  And to be fair, the cost for land line rentals have hardly gone up in that time.  It would also be fair to say the system is by and large maintenance free, with cables in most centres now underground and requiring very little repair or periodic maintenance.

Yet in days when calls on land lines are diminishing there should be an equal lowering of the maintenance budgets held by the two main providers, Telecom and Vodafone.  There are less breakdowns and reliability of their systems are very good.  And there should be nothing in that monthly charge that covers the expansion of the Cell networks - that should be incorporated in Cell charges not land line charges.

So let's look at some figures.  This table is based on Telecoms monthly charges to residential customers.  It's quite enlightening for sure.  I'd do another for Vodafone but at $50 a month they are slightly dearer than Telecom and the Telecom figures paint a base rate picture.

Monthly Charge


Annual take

Number of Homes

Annual take

Monthly Charge

Number of Days

Cost per Day

Number of Calls per day average.

Charge per Call

If Telecom were charging for local calls they'd be at around 20c a call, yet these "Free" calls seem to be costing the consumer 31c a call.  As outlined there is very little maintenance charges now so the only thing you could be paying for is calls and a rental amount.  But that raises another issue.  

Why don't the Telcos offer their customers a charge to "own" their phone number.  Instead of paying $552  a year in rental, get folks to pay say $500 to own their phone number (which is transferable, i.e. shift town all you do is change your number, no charge)  And get folks to fork out $10 a month for maintenance costs.  I know call numbers are dwindling so less maintenance/less use.  All the Telcos are doing right now is swimming in cash they aren't doing anything to earn.  Seriously, this is a wrought.  A phone used to be a necessity, but the Cell network is eroding it's past glory and folks just don't need to pay for a service they don't use much anymore.

Maybe the likes of Fair Go and Consumer Institute need to do an investigation.  It's a given they won't get anywhere as both Telecom and Vodafone won't want to divulge too much in case they lose their cash cow.

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