Residential customers will be seeing an increase of $2.25 on their August bills, bringing the monthly total to $34.45 (including VAT).

Cable & Wireless (C&W) disclosed the rate hike in a statement yesterday which outlined the change and the reasons for it.

It said the increase resulted from the Fair Trading Commission's (FTC) price cap decision on April 15.

The increment, which works out to about seven cents a day, will only apply to the residential fixed line service and the fixed line rate portion of Smart Choice packages.

It does not apply to special services like call-waiting and three-way calling and will not affect charges for international calls.

Cable & Wireless' vice-president of marketing David Smith said the increase would assist the company's continued investment in its network.

"The company has well-advanced plans for further expansion of services based on Voice Over Internet Protocol (VOIP). Cable & Wireless will continue to offer its customers the best possible value in fixed line and all services," Smith said.

He said the seven per cent increase was C&W's first on fixed line in 13 years.

The price cap ruling is valid for three years and allows the company to increase its rates by up to seven per cent each year.

After this three-year period, a new price cap will be developed by the FTC
for any services which the minister responsible for telecommunications might determine to still be regulated.