Auckland based Internet provider Orcon, once solidly opposed to local loop unbundling, has announced a $30 million plan to build an ADSL2+ network over the next five years .
While not revealing who is backing Orcon, managing director Seeby Woodhouse is bullish about what he says is "a very sexy deal". The backer is understood to be a large international telecommunications equipment supplier other than Alcatel and Huawei.
The ADSL2+ network will be used to build a wholesale business for Orcon, and Woodhouse says his company is making good progress in negotiations with Telecom.
"LLU is happening," Woodhouse says and adds that Telecom seems eager to work with Orcon on setting up the network.
Woodhouse says Orcon has made almost all decisions as to the network vendor that will supply the equipment for the ADSL2+ network. Asked when the network would be in place, Woodhouse says that Orcon is still unsure how quickly it'll be able to proceed with installing equipment into exchanges, but hopes trials will happen this year.
The first stage would be worth $14.1 million and would provide services to 250,000 customers in urban areas. Internet television (IPTV) and telephony (VoIP) are on the cards for the service. A second stage and third stage, costed at $16 million in total, aims to provide ADSL2+ to further urban areas and provincial centres.
Orcon also announced a $19.95 monthly price plan which gives entry level customers 256kbit/s downloads and 128kbit/s uploads and a 200MB data cap.
Customers have to put their toll calls through Orcon to get the $19.95 price, otherwise the plan costs $29.95. Questioned on how much it costs Orcon to supply the service, Woodhouse says it's around $30 including GST; however, Orcon makes around $10 per customer a month on tolls, Woodhouse says. He agress the margins are slim on the plan but says Orcon needs "scale" for the ADSL2+ network it is going to build.
Customers who exceed the 200MB/month cap will be charged 2c/MB up to a maximum of $149.95.