Why I bought Orcon

Introducing Orcon's new owner Warren Hurst and his plans for the company

When Vivid Networks began losing pitches, Warren Hurst looked at the company’s capability and discovered a core piece of technology was missing.

If he wanted to grow the business – which had been carved out of Vivid Solutions, a telemedicine provider – then he needed to get his hands on a category five soft switch. “It is the ability to on net and off net between IP voice and switched voice,” he explains.

Either he could buy and build the capability from scratch, or he could find company with existing services.

“There are not many cat 5 soft switches in the country. Farmside had just bought one but then they got sold to TeamTalk. We missed the boat on that one,” he says.

“Obviously the big telcos have got them. There were a number of other ones, but not on platforms we were comfortable with, the Nokia Siemens platform was attractive to us,” he says.

“That’s what started the process. We’ve become somewhat enamoured with the business since then.”

Hurst now has a 48 percent shareholding in Orcon, with the remaining 52 percent owned by a group of private investors which he won’t name. Together they have bought a company which has around 56,500 residential and SME subscribers.

But there are other, less publicised capabilities that attracted Hurst to Orcon. It has routing and datacentre capability in Australia and the US, which enables the company to resell international bandwidth to other ISPs. Wholesale services contribute around 15 percent to Orcon's revenue.

“Orcon is a big provider of wholesale internet bandwidth internationally and that’s another part we intend to expand upon,” he says.

In addition, Orcon has built a content delivery network with Sky TV, a major customer. In 2010 it acquired Bizo, a company offering ICT services to SME and corporate customers.

Hurst says this portfolio of services complements Vivid Networks, which he describes as a “niche telecommunications firm that provides highly secure WAN services to large private organisations and government agencies.”

Warren Hurst

Vivid Networks

The brand Vivid Networks will be retired and its seven staff absorbed into the Orcon company. Vivid Networks grew out of Vivid Solutions, a video conferencing company, which was originally the not-for-profit New Zealand TelePaedatric Society.

Hurst was working for the company as a consultant advising on how to create networking capability, “rather than just buying a solution off Gen-i”. After 18 months the networking business took off and it was decided to create a separate entity, Vivid Networks, in which Vivid Solutions has a 30 percent stake, and Hurst a 70 percent stake.

Hurst, who is 44 years old, has worked in ICT for most of his career and has both a technical and sales background. His first job was a linesman in Featherston when he was 19 years old and he’s had stints at Telecom, Clear Communications (forerunner to TelstraClear), in addition to being an IT consultant. Hurst is married and has two children. His 20-year son works as Cisco-certified engineer at Vivid Networks.

Orcon’s future

Hurst is promising some “game changing” moves from Orcon in the next twelve months and says it will be more aggressive in the Ultra Fast Broadband space. Orcon is one of the first RSPs to deploy UFB, and has around 1100 connections.

“Part of the industry commentary says we’re all (RSPs) on a race to zero, the lowest common denominator,” he says.

“If you were to rely entirely on the commoditised bitstream ISP service where it's data caps and access, then it’s a low cost, low return proposition.

“Innovative, over-the-top type, content-based services, that utilise the capabilities that that you can bring to the New Zealand public, are where we’re heading.”

He says mobile services are also “essential in a full service provision”, and it's his view that the mobile wholesale market has yet to mature in New Zealand. Orcon has an MVNO agreement with Vodafone, and “we have no desire to change that necessarily,” he says.

Vivid Networks bought national backhaul bandwidth from FX Networks and TelstraClear (now Vodafone) and Orcon has a “big relationship with Telecom wholesale.”

Since it was revealed that Kordia was in discussions to sell Orcon last month, and that Hurst was a possible buyer, he’s had “non specific discussions” with other players in the telco market, but “the form that takes won’t come out for some time”.

As for whether Orcon will bring its call centre operation back from Manila, Hurst says that will be a decision for the new management team. He says negative commentary about Orcon’s poor customer service is not necessarily borne out by customer service surveys.

“I don’t think that generally speaking the customer service is as bad as it gets,” he says.

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