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Regulator approves NTL price hike
Wednesday, October 03 2001
by Matthew Clark


The ODTR has approved a price increase application from NTL that will let the
company charge IEP12.21 per month in Dublin, Galway and Waterford. 





The cable company is now standardising its pricing across these three regions to
IEP136 a year. The new price equates to a rise of 15 percent in Galway, 26
percent Waterford and 34 percent in Dublin. 





According to the regulator there were 78 responses to the consultation issued in
August, including 71 from NTL subscribers. The telecoms regulator said this was
an "extremely high" level of response. 





Nevertheless, the price increase was approved providing that NTL met certain
conditions. Under the regulator's guidelines, NTL will be required to provide
data to let the ODTR measure performance of specific customer service related
parameters. NTL must also provide separate accounts in each of the licensed areas
to be reviewed by the agency. Additionally NTL must perform certain upgrades on
the quality of its service already outlined by the regulator. 





Failure to comply with these conditions in the specified timeframe will lead to
the ODTR issuing a direction to NTL to reduce the approved price by 10 percent. 





The government agency said just over half (51 percent) of respondents disagreed
with the proposed prices, with almost as many (45 percent) conditionally
supporting a price increase. The regulator cited a number of reasons for
approving the increase including various network upgrades, a lower frequency of
network breakdowns as well as new network management programmes. 



"This increase reflects the unavoidable business necessity to cover the costs
of vital infrastructural and operational investment by the company," Brian
Moore, managing director of NTL Ireland, said in response to the decision. He
also said that the price increase still represents good value for money and
remains less expensive than the rates charged by the company's competitors. 



"It (the price increase) reflects an increasing operating cost and investment
over the last few years," Anna Maria Barry, NTL's public relations manager, told
ElectricNews.Net. "Before Chorus even gets their approval for a price increase
their rates are even higher." 



Indeed, Chorus currently charges IEP15.35 per month in Cork and is proposing to
increase the monthly charge to IEP18.00 if approved by the ODTR. In Limerick,
Chorus charges IEP13.54 per month and is proposing to increase the monthly charge
to IEP17.50 if approved by the ODTR. Sky charges IEP14.96 per month for its basic
package. A spokesperson for the ODTR said a decision on the Chorus price
increases would be released in the next couple of weeks. 



Barry said NTL did not expect much fall off in business as a result of the move,
"When people see what they get for their money, why would they change?" she
said. 



In August, when NTL applied for the rate hike, it cited a number of operating and
capital expenditure costs that have led to increased costs since it applied for
its last price increase three years ago. Increased staff levels and the roll out
of digital services were among the reasons cited. 



However, the company did not meet its March 2001 deadline for digitalisation of
110,000 households and had not completed essential basic network upgrade work. 



But last month, NTL introduced its digital TV service, Go Digital, for 140,000
households, thereby repairing the failure to meet the end March 2001 deadline,
the ODTR said. The new service will give customers in Dublin, Waterford and
Galway up to 58 additional channels. 



NTL plans to introduce broadband interactive services next year through set top
boxes that have already been distributed to current digital customers.
Furthermore the company said that in the third quarter of 2002, it will begin
offering its long awaited high-speed Internet service that will let users connect
to the Net with a computer using the same set top box. 



NTL originally announced it would be providing a high speed Internet service in
2000, however the introduction of the service has been delayed on multiple
occasions. The company has not yet determined prices for its planned Internet
service.