TELEPHONE FINANCE.

Star (Christchurch), Issue 16738, 20 May 1922, Page 18

TELEPHONE FINANCE.

REASONS FOR REVISED TARIFF. (Special to the ‘’Star.’') WELLINGTON, May 20. Telephone subscribers became concerned. two months ago over a report that it was intended to substantially increase the rates. It was reassuring to find that th© subsequent half-yearly accounts went out with no sign of a change. However, the revisions are coming, and the delay has been due to the care taken to completely re-model the scale of charges. The increases will come, but from what can bo gathered, the cost of telephoning to small users, especially those in the country, is not likely to be materially increased, if any change at all is made. An investigation of the systems of telephone charges has been made on behalf of the Post and Telegraph Department by one of its high officers, and a good deal of the information he collected regarding systems in other countries has been published. Taking this as a guide, it becomes evident that the inevitable changes will go in the direction of making a heavier charge on busy telephones, although the system of assessing payment according to the actual number of calls is not officially favoured. The telephone balance sheet, as published in the Dominion’s official statistics, is not satisfactory from the prj fit-making point of view. No doubt the railway yolicy of regarding means of communication as a national necessity not to be assessed m actual money returns will apply to the telephones of New Zealand, but in these figures the Postmaster General finds justification for making some important changes, the details of which are not yet available. For many years the average return from telephone has been less than throe per cent on the capital invested, but since the end of the war, matters have become worse. Successive wage bonuses, totalling eventually a 62 per cent increase on pre-war salaries, and great increases in cost of material, threw the cash statement on to the debit side in 1920. There had been an npaprent difference of £21.303 of income over expenditure in 1919, but in the following year a loss of £19,02f appeared. This came down to a loss of £10,655 in 1921. The expenditure includes 6 per cent for debenture interest, but nothing for depreciation, °o that the loss is really larger than the figures indicate. It is remarkable how the capital investment in telephones and lines has grown, the total of £2,641,000 being more than double the invested capital at the time the war commenced. Subscribers have not increased in exactly similar proportion, but th© average cost of a telephone connection has grown from £2B pre-war to over £35 to-day. It lias recentlv been announced that the Dominion’s telephones showed a good credit balance as a result of last year’s operations, but the financial position officially regarded ns warranting a revision of th© chargee.