Telstra raises cost of calls and line rental

TELSTRA is pushing up call costs and fixed-line rentals to squeeze more revenue from its declining fixed-line business.

By InvestSMART · 16 Oct 2010

By InvestSMART ·
16 Oct 2010

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TELSTRA is pushing up call costs and fixed-line rentals to squeeze more revenue from its declining fixed-line business.

Connection fees for all non-local calls will increase from 39? to 45? on December 1. Line rental costs for HomeLine Complete and HomeLine Plus plans would increase by $12 a year, Telstra executive director Rebekah O'Flaherty announced yesterday.

The price of telecommunications had risen by 1 per cent over the past five years while the consumer price index had increased 16 per cent in the same period, she noted in a press release.

Facing declining profit and market share, Telstra plans to win back customers in the mobile market through aggressive pricing, and arrest a decline in fixed-line subscriptions with new products.

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Frequently Asked Questions about this Article…

What call cost and line rental changes did Telstra announce?

Telstra announced it is increasing call costs and fixed-line line rentals. The article says connection fees for all non-local calls will rise from 39? to 45? on December 1, and line rental costs for HomeLine Complete and HomeLine Plus plans will increase by $12 a year, according to Telstra executive director Rebekah O'Flaherty.

When do Telstra's connection fee and line rental increases take effect?

The article states the connection fee increase for non-local calls takes effect on December 1. The $12-a-year line rental increase for HomeLine Complete and HomeLine Plus was announced recently, though the article does not give a separate effective date for that change.

Which Telstra plans and services are affected by the price rises?

According to the article, the connection fee rise applies to all non-local calls, and the line rental increase specifically affects Telstra's HomeLine Complete and HomeLine Plus fixed-line plans.

How much will my Telstra line rental go up on HomeLine plans?

The article reports Telstra will increase line rental costs for HomeLine Complete and HomeLine Plus by $12 per year.

Why is Telstra raising call costs and line rental prices?

The article explains Telstra is pushing up prices to squeeze more revenue from its declining fixed-line business. Facing falling profit and market share in parts of its business, the company is looking to stabilise revenue while it develops new products.

What does the Telstra price hike mean for investors watching fixed-line revenue?

The article frames the increases as a revenue-measure aimed at a shrinking fixed-line business. For everyday investors, the key takeaway is that Telstra is trying to boost fixed-line cash flow while it competes to regain market share elsewhere — the article doesn't provide earnings forecasts or investment advice.

How do telecommunications price changes from Telstra compare with overall inflation?

Telstra notes in the article that telecommunications prices have risen by just 1% over the past five years, while the consumer price index (CPI) increased about 16% over the same period, highlighting a disparity between telecom price growth and broader inflation.

What other strategies is Telstra using besides price rises to address market share and profitability?

The article says Telstra plans to win back customers in the mobile market through aggressive pricing and to arrest the decline in fixed-line subscriptions by introducing new products, alongside the announced price increases.