Prices are spiralling everywhere - except your phone bill

Saturday, 7 March 2026

Paul Brislen is the chief executive of the Telecommunications Forum, the industry body for the telco sector.

OPINION: If you thought things were getting expensive, you’re not alone. Costs have gone up enormously over the past few years or so, and yet we’re just supposed to absorb that price rise.

Milk, butter, vegetables, meat; they’ve all gone through the roof, but so too have rent, insurance, travel costs, clothes, and that’s before we get into the power bill, petrol or rates. No sector seems to be immune to it.

I thought it was just me getting old because it seemed to be far more than the handful of percentage points increasing, we’ve seen year after year. Somehow it feels like prices are dramatically higher, but I don’t remember seeing any data on this or much noise in the media beyond the odd item here and there.

So, I was shocked to see a post from Westpac senior economist Satish Ranchhod over on LinkedIn where he outlined the price rise for multiple consumer items between 2002 and 2025. In that time, the consumer price index (CPI) reports a rise of 83% as an average figure.

Compound interest strikes again – it’s only 2.5% year on year but over the quarter century the price of your morning coffee has jumped from $3.50 to $6 without any real warning.

The real problem Satish identifies is that many of the areas with the largest price rises (food +85%, petrol +130%, insurance +150%, household energy +224%) are unavoidable essentials while the things that haven’t moved much (like travel, recreation and vehicles) are relatively speaking considered as luxury items.

There is only one area where costs have fallen dramatically over the past 25 years and that’s telecommunications. Our products and services have dropped in real terms by around 30%. The reason for that is simple – we might charge the same or slightly higher than we did in 2002, but we now offer vastly more data and calling standard, which makes the numbers look really good.

In 2002 I had a fixed wireless connection with 1Mbit/s download and a traffic cap of about 1GB a month. Today my plan is literally one thousand times faster and has unlimited data and a quick look at my usage shows I have chewed through 20GB of data just today: 726GB a month, yet my price is nearly the same as I paid back then.

It’s much the same with mobile. Back in 2002 my plan included a tiny amount of data, a capped number of text messages and calls and much of that was on-net only. Today I have unlimited calling and texting and enough data to be useful when I’m out of the house at a speed that is frankly something out of science fiction.

While technology advances have played a major role in increasing the capability of telecommunications, the costs have been kept low by our dual-track approach of regulation and investment.

The introduction of the Telecommunications Act in 2001 and the updates that have taken place set out the regulatory environment and encouraged competition between retail providers.

At the same time the government invested heavily in both fibre to the home (the Ultra Fast Broadband programme) and in rural connectivity (via the Rural Connectivity Group) where commercial realities meant customers wouldn’t be covered.

This model has worked incredibly well in keep New Zealand telecommunications ahead of our competitors around the world and in keeping prices low. Take a look across the ditch for a fibre connection and you’ll find they’re few and far between, not capable of carrying as much data and come in at a price that would make you think twice about signing up.

Inflationary increases don’t appear to be done with us yet, so it’s important to remember that while the annual rate might be moderate, the cumulative impact is vastly more than we would like to see. Families must make tough choices about what essentials they can trim and what luxuries they can cull entirely. Every month I seem to spend a fortune on streaming services – a category that didn’t exist back when Satesh’s chart began, but which now takes up a significant portion of my family’s budget.

As we consider our place in the broader scheme of things, it’s good to reflect once in a while on the things we’ve got right. Improving products and services while reducing overall cost is a huge win for consumers, and the Commerce Commission’s customer survey results demonstrate that customers are aware of that.

The survey says more than 70% of customers are satisfied with their telecommunications services (77% in mobile, 71% in broadband) and that’s a huge turnaround from the bad old days of Telecom’s monopoly in the 1990s.

I think if you were to ask most people what their pain points are, economically speaking, you’d hear about rents, mortgages, insurance, fuel, power and groceries. Telco, I suspect, wouldn’t make the top ten, and that’s a really good thing.