Northwestel raising cost of new phones

Phone services are going to cost you more next month. Northwestel plans to raise service charges as of July 16.

Phone services are going to cost you more next month.

Northwestel plans to raise service charges as of July 16.

It’s the second rate increase this year.

Six months ago, residential rates increased $2 per month and the price of a business line jumped $5 per month.

Now, in the face of an expected $300,000 annual revenue shortfall, Northwestel is turning to customers again.

Residential installation charges will rise to $54.80 from $51.30. Businesses will see charges rise to $70 from $59.70.

If an onsite visit is needed, the cost of setting up home and business lines will be $110.90 and $167.90 respectively, up from $98.05 and $157.60.

The rate proposals were submitted to the Canadian Radio-television and Telecommunications Commission on June 13 after several months of back-and-forth between Northwestel and the regulator.

Northwestel asked the CRTC to approve the new pricing scheme by Monday morning.

The CRTC has agreed to provide Northwestel with an $18.9-million annual subsidy until 2010 to support its residential phone service.

This subsidy is in addition to a supplementary donation that amounted to $9.8 million in 2006, $9.1 million in 2005, and $9.3 million in 2004.

In its latest subsidy negotiations, the CRTC challenged Northwestel’s accounting.

“They did indicate that there was a certain amount every year — $300,000 — that they would not cover by supplementary funding,” said company spokesperson Anne Kennedy.

“They felt that we needed to go back out and adjust a number of our rates to recover costs from the prices that we charge for those services.”

The telco’s customers are now paying some of the highest non-recurring phone-related charges in the country.

The only company charging more than $54.80 for new residential phone access is Northwestel’s parent company Bell Canada, which charges $80 whether a site visit is required or not.

Bell also has the highest charge for a new business phone line, set presently at $117. As of July 16, Northwestel will carry the highest prices for new installations requiring a site visit.

Northwestel could have increased monthly subscription rates to address the shortfall.

“We had just raised it (subscription rates) earlier this year, so it’s not something…” Kennedy began.

“It’s (price increases are) something we wanted to spread out to reduce the impact on our customers.”

However, the CRTC gave the nod to monthly subscription rate increases over the next four years, subject to what the company calls “flexible” and “variable” price caps.

Northwestel has separated long-distance from local access “baskets.” It makes long-distance service more competitive and reduces their subsidy of local service.

As a result, local service rates had to go up.

In January, the monthly residential services went up to $31.33 from $29.33.

Single-line business rates rose to $54.70 per month from $49.70. Multi-line business rates went to $63 per month from $58.

Northwestel plans to raise business rates again in June 2008 to cover a $150,000 deficit from 2007.

Most of Northwestel’s services are priced below cost, said Kennedy.

The directive to raise rates came from the CRTC, which felt “there was room to move.”

“If you look at rates across the country, ours are fairly comparable,” she said.

Costs of serving the North, one “of the most remote and rugged areas of Canada,” are high and don’t scale with population as they do in the South.

Northwestel’s market is “a total population of 110,000, which is comparable only to a small city down south, spread over four million square kilometers,” Kennedy wrote in an e-mail.

Northwestel is also an active contributor to local charities and community events.

Northwestel contributed more than $740,000 in cash and in-kind donations in 2006, and $370,000 in 2005.

Contributions of $360,000 to the 2007 Canada Winter Games are partially included in that total.

“We were top-level sponsorship,” said Kennedy.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Council contemplates wage freeze for 2021

Hartland brings forward notice of motion

Raises approved for City of Whitehorse management

Deal will begin with 2.6 per cent increase retroactive to 2019

What to expect: Yukon legislature resumes Oct. 1

In March the legislative assembly quickly passed the budget before ending early

WYATT’S WORLD

Wyatt’s World for Sept. 30, 2020

Yukon artist’s work featured in national exhibit

Nicole Favron named as Yukon winner for 2020 BMO Art! competition

Men charged after police see suspected crack cocaine during traffic stop

Two men are facing charges after a traffic stop in downtown Whitehorse… Continue reading

CPAWS Yukon, Yukon Conservation Society encouraged by territory’s parks strategy

The conservation manager for CPAWS Yukon and executive director of the Yukon… Continue reading

School council elections taking place the first week of October

There are 30 contested spots on school councils in the territory

Hot Hounds bikejor race serves as lone summer competition

Held in Mount Lorne, the race was organized by the Dog Powered Sports Association of the Yukon

Whitehorse operations building officially open

Staff are taking phased approach to moving in

North of Ordinary Experience Centre shutting down

COVID-19 has caused bookings for the space to become almost non-existent, owner says

Canada Games Centre could get new playground

Council to vote on contract award

City hall, briefly

A look at decisions made by Whitehorse city council this week

Most Read