Customers of cable television company NTL could face price increases of up to 34 per cent later this year. This follows moves last week by another cable group, Chorus, for sanction to increase its prices.
NTL has applied to the telecoms regulator for a standard price of £136 (€173) per annum in each of its three cabled areas - Dublin, Galway and Waterford - where it currently delivers basic cable services to its 370,000 customers.
The increases range from 15 per cent in Galway to 34 per cent in Dublin, with a 26 per cent rise in Waterford. This would result in a £34.35 annual price increase in Dublin from the current £101.65. Customers in Waterford would see a £27.90 rise from £108.10 if the tariffs are agreed, while NTL has applied for a price increase of £18.48 from £117.52 in Galway.
The increases, if agreed, would be the first by NTL since January. In a consultation paper published yesterday, telecoms regulator, Ms Etain Doyle, said she was prepared to consider a review of prices in light of the additional capital invested by the company and an improvement in its service.
"Price increases are not popular. However, I have to acknowledge the substantial investment by NTL in network and services and the effects of inflation compounded over the last few years. I am particularly concerned with the difficulties companies are experiencing in building out networks and the resulting increased costs due to delays and uncertainties about planning issues," the regulator said.
Last week, Chorus also applied to the regulator for permission to raise its charges to fulfil its pledge to roll out digital television and improve its poor customer service record. Its 250,000 cable customers face price hikes of up to 29 per cent later this year if the regulator agrees to its request.
According to NTL's application, operating and capital expenditure costs have risen by more than 30 per cent in the past two years, with head count rising from 314 in 1999 to 597 in 2000. Ninety per cent of the staff increases were in either technical or customer service areas, NTL said.
Since acquiring Cablelink in 1999, NTL has carried out a major capital investment programme, partly to improve the existing infrastructure and partly to prepare its network for the introduction of digital services, direct telephony and internet access.
However, it did not meet its end-March deadline for digitalisation of 110,000 households and had not completed essential basic network upgrade work. But the regulator said NTL has indicated that upgrade programmes agreed with her office were complete and that it was ready to launch digital television services to 140,000 households before the end of September.
"The upgrade work will be verified over the period of the consultation," the regulator said.
However, the consultation paper said that the upgrading work carried out to date has contributed to a 40 per cent reduction in service breakdowns during the first quarter of 2001 compared with the previous year. It also confirmed that NTL accounted for only 20 per cent of complaints received by the regulator, despite having approximately 60 per cent of cabled homes.
The regulator also confirmed that NTL was committed to introducing services to an additional 10,000 households in Dublin per month between September 2001 and March 2002. The firm plans to have 290,000 homes enabled for digital services by the end of 2002.
NTL also cited programming costs, which it said rose by 11 per cent since the last price review in November, as a key reason for its request for a price increase.
The consultation period on the issues raised in the consultation paper will run from August 21st to September 17th, with a final report being published either next month or in October.
