TekSavvy is raising internet rates for its residential customers starting next month.
The telecommunications company based in Chatham said starting May 1, internet rates will jump by $5 for all of its residential users to stabilize the business.
TekSavvy Vice President of Marketing Mike Stanford told Blackburn News the company has been losing money because lower fees to access networks owned by the larger telecom companies promised by the Canadian Radio-television and Telecommunications Commission (CRTC) last summer are still under appeal by the big telecoms and the courts are currently closed because of the COVID-19 pandemic.
TekSavvy lowered customer rates after an August 2019 decision by the CRTC.
Stanford said TekSavvy "had to act" while the lower fees are on hold because business is "tough" right now without the new fees and because consumer internet demand has exploded while people work and study from home during the crisis.
He said the $5 rate increase reduces the losses to a more bearable point but doesn't get the small private internet provider back to profitability.
"We're not protecting profit," Stanford said.
He said residential customers were notified about the rate hike at the end of March and since they have been expressing their displeasure, which he said was expected.
Stanford said he understands the timing is not good and the decision was not taken lightly.
"The timing is terrible," he said. "It's the last thing we wanted to do."
Stanford said TekSavvy is fighting structural problems in the industry and the company is "stemming losses" that are "unsustainable".
TekSavvy has waived overage charges for current customers on limited internet plans until April 30, 2020 to help customers stay connected during the pandemic.
On April 13, the company called on the CRTC for emergency relief.
It also asked the competition bureau in February to investigate Bell and Rodgers for internet rate fixing.