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To what extent do costs of investment, operation and maintenance of water networks vary in relation to density and dispersion? What are the redistributive effects of these cost structures among various categories of consumers? This case study is based on the distribution of water in the urban area of Lausanne, Switzerland. This article evaluates the effective costs of urban sprawl on water services. The results show that the costs are high in respect of the equipment and upkeep of networks in the city centre. These high costs are compensated for, by economies of scale due to density. In contrast with traditional studies, the evaluation of effective costs underlines the influence of location on distribution costs. Finally, the study demonstrates that the costs of dispersion and low density can largely be absorbed by the usersbecause of high connection charges and tariffs that particularly target houses.