Cheap phone calls hit by Telecom levy

It may cost more for overseas students to phone home next year because of Telecom's planned payphone surcharge, the Consumers' Institute says.

Telecom this month announced plans to apply a surcharge to providers of toll-free and calling card services, when calls to these services are made from Telecom payphones.

Consumers' Institute chief executive David Russell said overseas students could get caught out by the surcharge as they often used cards to get cheap calling rates to their home countries, but had to go through an 0800 number to make the connection.

Mr Russell said it remained to be seen whether businesses with 0800 or toll-free numbers passed the cost of the surcharge on to consumers or just absorbed it.

Telecom said more than two-thirds of all calls made on payphones were to toll-free numbers or were calls made using calling cards.

"The number of those calls made on payphones has been growing sharply in recent years, contributing to the situation where the payphone network's costs have run ahead of revenues for some time," said national manager payphones Sheridan Broadbent.

"Telecom's payphone network includes more than 5000 payphones in cities, towns and communities throughout New Zealand.

"We looked at how other countries have addressed this issue and have decided that a surcharge to the providers of these toll-free and calling card services will be the best way to ensure that all providers are contributing fairly to the cost of operating and maintaining the payphone network," Ms Broadbent said.

The surcharge will be introduced in April next year.

As a provider of toll-free and calling card services, Telecom planned to pass the costs on to its users of these services.

She said the surcharge would not apply to the not-for-profit organisations that are supported through Telecom's Voluntary Welfare Organisation Scheme.

"And of course it won't apply to 111 calls."

Similar payphone access charges are in place in countries including the United Kingdom, Ireland, the United States, France, Germany, Norway, Canada and Singapore.

Early next year Telecom will notify its retail prices to customers offering toll-free numbers and callers using its calling cards from payphones.

- NZPA