Ihug is about to launch a 256Kbps wireless internet service priced at a flat $49.95 a month.
Along with the company's announcement this week that it has withdrawn from the government radio spectrum auction, the new initiative suggests that Ihug is trimming some of its grander ambitions and focusing anew on its core business of internet delivery.
The name of the new service - Ultra Lite – may pre-empt a budget 128Kbps version of Telecom's DSL service which is being trialled internally at Telecom under the name Jetstream Lite. The company says it will be available in "selected regions" where it has transmission towers – currently Auckland and Christchurch – for the terrestrial version of Ultra.
As well as bringing customers up from the current marginally profitable $24.95 industry benchmark for standard dial-up service, Ultra Lite will allow Ihug to tout a high-speed product with the clear, simple flat-rate pricing on which it originally built its business.
The company actually launched its wireless service, as StarNet, on a flat-rate basis in 1997 but was obliged to alter pricing when it discovered some users were using the service to download massive amounts of data. It subsequently went from a 3Gb monthly data cap to the current Ultra model which sets a 300 hour monthly cap.
Ultra Lite won't be the only high-speed flat-rate product on the market – Chello offers a 500Kbps service for $90 a month via Saturn's cable network. Ihug will be lookming to emphasis both pricing and feature – in the form of a multicast Usenet news and mail service.
But Ihug director Nick Wood says Ultra Lite will be the "most affordable" high-speed service on offer.
"Ihug has always been a leader in innovation," he says. "We are determined to continue that role; delivering real savings and faster Internet access to consumers."
Wood says that through Ihug, New Zealand is now enjoying some of the world's most cost effective high-speed Internet access.
"If you look at international trends, even the US is relatively expensive.† Americans are currently paying up to $US60 to for high-speed connections. New Zealand is doing very well for a country with such a small population."
Ultra Lite will officially launch tomorrow.