Orcon moving into Wellington

State-owned telco Orcon has started connecting Wellington customers to phone and internet services.  

Orcon chief executive Scott Bartlett said it had "switched on" its equipment in two major Telecom exchanges in Courtenay Place and Wellington Central and could reach 40,000 homes and businesses.

Customers could expect speeds of up to 24 megabits per second and competitive pricing.

The telco had installed equipment in 36 Auckland exchanges and the increased competition reduced the cost of phone and broadband services there by 20 percent, Mr Bartlett said.

"We have been paying too much for broadband and phone for way too long. Competition fixes that."

Orcon would look to install equipment in - or "unbundle" - several more Wellington exchanges in the next few months, including in Khandallah, Newtown, Miramar, Rongotai and Lyall Bay.

It would also consider unbundling in the Hutt Valley, Porirua and Johnsonville, and after Wellington would move in to Tauranga, Hamilton and New Plymouth. Its ADSL2+ could be easily upgraded to faster VDSL2 technology, which it had trialled.

Telecom already had competition in Wellington with TelstraClear providing services over its fibre-optic network, he said.

"But TelstraClear is not everywhere. We are really keen to see how customers respond to a third player."

Mr Bartlett said Orcon had no plans to follow Vodafone and defer unbundling while Telecom rolled out roadside cabinets - which bypass local exchanges and bring fast fibre-optic cable closer to housedholds.

There are fears the cabinets would mean customers were effectively cut off from the exchanges, "stranding" the equipment of other telcos.

"We're always reviewing.

"If we're spending capital for new investments we have to make sure those investments are working, but we haven't come anywhere near pushing the pause button."

Nor had the Government's $1.5 billion fibre-optic network plan prompted a re-think, he said.

The details of the plan are yet to be confirmed but the equipment installed by telcos in exchanges would become redundant if fibre was rolled out to homes and businesses.

"I think there's a big difference between what was assumed would be possible with $1.5 billion and what would actually be possible with $1.5 billion."

A study revealed the true cost of fibre-to-the-home would be around $7 - $8 billion, he said.

"But if it happens, it happens, and we'll find a way to work with it. At the end of the day we don't want to own infrastructure, we want to be able to deliver a good service to customers profitably.

"We probably would have got a return on our investment by the time they did it anyway. You can't just rip up every street in the country overnight."

Wellington ISP Actrix installed equipment in a central Wellington exchange in September but is yet to announce its plans. 

TelstraClear spokesman Chris Mirams said it would push on with its plan to spend tens of millions of dollars on an unbundled service from 70 of Telecom's 714 exchanges and more details would be released "in the short-term".

"We're not Auckland-centric, we have a nationwide-focus."

- © Fairfax NZ News