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Orcon smashes the price of broadband

6 June 2006

Orcon smashes the price of broadband down to $19.95; announces new wholesale network

Orcon Internet is leading the charge to provide New Zealanders with affordable broadband with today¹s launch of a new $19.95 broadband plan. For the first time in New Zealand history, the price of broadband has gone below the average price of dial-up. This is the first step in preparation for a $30 million investment in broadband infrastructure over the next 5 years by the 100% kiwi-owned company.

³There are still hundreds of thousands of kiwis on dial-up paying $27.95 per month; with our new broadband plan priced at just $19.95, all kiwis can afford the luxury of broadband at home. Our new plan at $19.95 has the same specs as Xtra¹s $29.95 offering, but with bill shock protection for mum and dad consumers² says Orcon¹s General Manager of Operations Scott Bartlett.

³Our plans have always been far superior to those of other larger players in the market, with our existing $29.95 plan offering 10 times as much data and 10 times cheaper excess data; but this new plan at $19.95 provides for a very affordable entry point for those customers who have put off the leap from dial-up to broadband due to price.²

³We think it¹s about time that New Zealand catches up with the rest of the world and has access to affordable broadband; and we know that people are fed up with waiting for it to happen² continued Bartlett. Orcon speculated $10 per month broadband would be on the cards when LLU was first announced last month.

³We decided not to wait for LLU to kick in, and put this $19.95 offer out there now. We remain committed to our goal of $10 per month broadband, but it will only be feasible once LLU is underway² continued Bartlett.

³In order for us to get as many kiwis on true broadband under LLU, we need scale to justify our investment plans. We are partnering with a number of other ISP¹s to wholesale off the new network, but a large part of our motivation behind the new $19.95 broadband plan is to bring new customers to Orcon who have the desire to support a kiwi company in delivering quality broadband now and into the future.²

This bold move is part of a long term plan that will see Orcon invest over $30 million in building a new wholesale ADSL2+ broadband network, capable of delivering download speeds of up to 24Mbit, voice services and IPTV (with over 50 channels set for launch in late 2007). ³We have decided to build a true broadband network that can deliver the kinds of speeds and services that customers are demanding today. Not only fast downloads, but triple-play services such as IPTV and voice services. Orcon has taken the additional step of committing to making our new ADSL2+ network available to wholesale partners. Today we have only one wholesale ADSL network in New Zealand, but we are committed to opening up our network to any ISP or technology access seeker for wholesale, thereby breathing new life into the ISP industry² says Bartlett.

Orcon¹s new network will be built initially in the main centers, with other areas including rural/provincial cities such as Hastings, Napier, New Plymouth, Palmerston North, Dunedin, Whangarei, Hamilton, Tauranga, Nelson, Invercargill, Masterton and Wanganui coming online in stages 2 and 3 of our network build (over a 2-5 year period).

An exact construction start date has yet to be set; as Orcon eagerly awaits the results of either commercial negotiation with Telecom for LLU access, or legislation from the Government consistent with the broadband package announced in early May.

Orcon is already the third largest ISP wholesaler in New Zealand, and as such is well placed to make open access wholesale LLU work. Orcon is also the 4th largest ISP in New Zealand and is 100% Kiwi owned and operated.

Broadband plan details: 256Kbps/128Kbps $19.95 p/month with Orcon tolls $29.95 p/month without Orcon tolls 200MB of data $0.02c p/MB excess charge Charging cap of $149.95 p/month Free connection (saving of $99)

Investment details: $14.1 million in stage one, delivering ADSL2+ services to over 250,000 kiwis, including IPTV and VoIP $16 million in stages two and three, delivering ADSL2+ services to more urban and rural/provincial centres Partnering with large international Telecommunications business (to be announced)

ENDS

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