Book Reviews | Gordon Campbell | News Flashes | Scoop Features | Scoop Video | Strange & Bizarre | Search

 


CallPlus buys Orcon — deal makes sense

While CallPlus isn't saying how much it paid to buy Orcon. Assuming CallPlus paid the right price — which is a safe bet — the deal makes far more sense than any alternative mentioned in recent weeks.

Selling internet services in New Zealand is brutal. Margins are wafer thin. Competition is tough. And the cost of customer acquisition is high.

The path to profit is to build scale so that unavoidable, fixed costs spread over the widest number of accounts. Then find ways of adding value.

It's about to become more brutal.

In the copper era ISPs had the option to differentiate by putting their own kit in exchanges. With fibre, they have to buy from the same menu of services from Chorus and the local fibre companies, all at the same price within any region. That leaves ISPs little room to play with.

So scale is essential. Orcon was never going to get there from here. CallPlus had a shout of building the necessary scale, but it would have been slow, possibly too slow. Picking up a competitor short circuits that. It makes sense.

CallPlus' press release says the company has a 15 percent market share. I suspect there could be more consolidation to come.

© Scoop Media

 
 
 
 
 
Top Scoops Headlines

 

Gordon Campbell: On The Ethics Of Publishing The Trump Dossier

The controversy over the dossier purporting to show US President-elect Donald Trump’s alleged ties with Russia has been virtually overshadowed by the related controversy over whether the Buzzfeed site should have published the dossier in the first place... More>>

ALSO:

Gordon Campbell:
On Meryl Streep’s Speech

Primarily, Meryl Streep’s critical speech at the Golden Globes – which is the award ceremony hosted by the Hollywood Foreign Press Association – was a defence of journalism and of journalists... More>>

New HiveMind Project: What Should We Do About Sugar?

While most people agree that increased sugar consumption is a major cause of too many New Zealanders being overweight and obese, what we should do about this remains a matter of debate and argument. More>>

ALSO:


Gordon Campbell: On Vladimir Putin’s Wonderful, Fabulous, Very Good Year

Safe to say that no-one, but no-one has had a better 2016 than Vladimir Putin. What an annus mirabilis it has been for him. Somehow, Russia got away with directly interfering in the US election process, such that a friendly oligarch is about to take up residence in the White House, rather than a genuine rival. More>>

ALSO:


Gordon Campbell: On The Media Normalisation Of Trump

We all supposedly agree that the media is going to hell in a tabloid handbasket, but the trends to the contrary can be a bit harder to spot. In his 1970s book The Right Stuff, Tom Wolfe had mocked the way the media instinctively acts as what he called The Victorian Gentleman. More>>

ALSO:

Binoy Kampmark: The Reality Of Fake News

Fake news as reality; the inability to navigate the waters in which it swims; a weakness in succumbing to material best treated with a huge pinch of salt. That, we are told, is the new condition of the global information environment. More>>

Get More From Scoop

 
 
 
 
 
 
 
Top Scoops
Search Scoop  
 
 
Powered by Vodafone
NZ independent news