Exetel has raised the price of all their plans by $3.00, including the contracts of current customers who had signed up from December 2008 until the present date.

Customers unhappy with the changes are allowed to churn away from Exetel without paying an exit penalty if they cancel the contract within 42 days of receiving the notification.

Exetel's chief executive John Linton sent an email to customers explaining the price hike, with the subject heading "Tougher times – swings and roundabouts".

The price rise seems out of step with the rest of the Australian broadband market, as fierce competition has driven down monthly plan costs and increased download data quotas.

Mr Linton told customers Exetel has a policy of increasing the value or reducing monthly charges of the services current customers are using, but this time the company has had to implement an increase.

"We fully understand that any price increase of any magnitude is unwelcome and if there was any way of us avoiding imposing this charge then please believe us when we say we have spent almost four months trying to find it," Mr Linton told customers in the email.

"The fact of the current business environment, at least as it applies to Exetel, is that our costs of providing residential services have risen substantially and if we don't charge more for our services we will eventually reach the point where we will not be able to provide them," he added.

In December 2008, Exetel raised their prices across the board, resulting in many customers expressing their frustrations on forums. More recently in May 2010, Exetel decided to alter its on and off-peak times for their current customers’ plans, but then went back on the decision after receiving numerous complaints about the issue.

In the latter case it would seem customers had signed up to Exetel because of its long off-peak period, and were less than pleased to discover the main element that had driven their choice of broadband provider being taken away from them while still under contract.

Exetel’s terms and conditions state, 'Exetel may vary any part of the Agreement without the Customer's consent provided Exetel complies with the Telecommunications Legislation.' This gives the ISP free reign to manipulate charges and other conditions at any time.

However, it is also stated, 'If Exetel varies a Fixed-Term Agreement it must offer the Customer the right to cancel the Service (within forty-two (42) days from the date of the notice) without incurring fees or charges other than Accrued Charges.'

So, at least the internet provider is giving the customer the means to leave if they aren’t happy with the sudden change to their contract. It remains to be seen why Exetel didn’t simply raise the price of their plans, as opposed to instituting the $3.00 price rise in the form of an ‘Administrative fee’.

On the bright side, even with the $3.00 price hike Exetel still have one of the cheapest ADSL1500 connections at $35.00 per month (plus $3.00) for 10GB in peak and 10GB in off-peak, or the ADSL8000 plan for $45.00 per month (plus $3.00) for 10GB in peak and 20GB in off-peak.

Exetel’s $20 ADSL2+ service when bundled with its $30.00 landline rental is still a steal at $53.00 (total) for 20GB in peak time, and 180GB in off-peak.

If you are upset at this turn of events you could consider churning to TPG’s home phone bundle for $49.99 with 15GB in peak and 15GB in off-peak periods. iPrimus also has a cheap ADSL1500 home phone bundle for $39.95 (plus $29.95 landline rental) with 20GB of data.

Call us on 1300 106 571 for more details on TPG and Exetel plans, or 1300 137 794 for iPrimus deals.

Note: If you are still under contract and do decide to leave Exetel because of this $3.00 monthly increase, you will be charged the usual $100 cancellation fee. However, if you call Exetel Residential Sales within the 42 day period, and tell them the increase is the reason for your leaving, Exetel will refund the cancellation fee in full.