Orcon offers free fibre, reports lousy UFB take-up, hints at big Chorus move

July 18: Orcon is offering free fibre under the Ultrafast Broadband (UFB) rollout – at least until the end of this year.

What are the catches?

One, you have to sign a contract until the end of 2013 (not too bad as these things go; I had expected Orcon to demand a longer paid commitment follow the free period).

Two, the free residential plan (usually $75) is a reasonably modest, by fibre standards. You get 30Mbit/s up and 10Mbit/s down with a stingy 30GB data cap (at a time when some providers are now offering half terabyte or 500GB options on copper DSL).

If you want a more realistic data cap, or more speed, you have to pay extra (in terms of data caps that means $14 for an extra 60GB, $24 for 200GB or $124 for 1000GB.

All of those data caps are for 30Mbit/s speed plans. To upgrade to full-tilt, 100Mbit/s download speed, you'll need to shell out another $35 on top of that).

Connection is free.

Orcon (state-owned by dint of being a Kordia division) is also offering $130 "base" business and school plans free until the end of this year. Unlike the home plans above, they don't include a SIP (business-grade VoIP or internet calling line). The data cap is 30GB; download speed 30Mbit/s, upload 10Mbit/s.

Lousy UFB uptake
CEO Scott Bartlett also confirmed at a media event today that his company – the first of the big five ISPs to offer a UFB plan – only has 200 customers (most in Auckland and Whangarei).

To put that in context, fibre now runs past 45,000 homes (expected to be 140,000 by the end of this year).

Orcon says it has 8500 on a waiting list for when fibre reaches their street.

Mr Bartlett said nationwide, there have been only 1012 connections under the UFB plan, for which the government is chipping in $1.35 billion (most in the form of an interest free loan to Chorus, and through buying non-voting shares in the Telecom spin-off).

He suspects most of the 200 beyond Chorus belong to network operators or telcos.

That waiting list? Actually not too shabby
I'm a fibre fan, and I appreciate Orcon is trying to shake things along.

But there's also a degree of gamesmanship going on here.

Two hundred is a lousy number of live connections.

But 8500 on the wait-list is arguably not too shabby.

The government has always said it would priorities education, health and business in the project's first half-decade. As the head of one the country's largest retail ISPs, Mr Bartlett is obviously inclined to agitate for a broader roll-out, faster.

Big Chorus move?
Beyond ultra-slow take-up, a second controversy has been over Chorus' connection fee policy. Chorus has offered free UFB residential connections until the end of this year, but has been fuzzy on its stance past Christmas.

Now, Mr Bartlett hears Chorus – after talks with Crown Fibre Holdings – is on the verge of announcing a long-term free connection policy.

The Orcon boss has previously told NBR that uncertainty about connection cost could weigh heavily on the project once Chorus' free connection policy ends at the end of this year. Punters would be unwilling to shell out $1000+ to connect fibre from the curb to their home (Chorus holds around 80% of the UFB project by premise.

The other local fibre companies – Enable, Northpower and Ultrafast Fibre have been much more on the front foot with free connection offers – both because they have no legacy copper broadband business to fall back on, and because they negotiated lesser contracts with Crown Fibre Holdings.

For example, Chorus is only required to cover the cost of fibre 5m into a home – not as the crow flies but as the cable ducks and dives – while Enable, Ultrafast and Northpower have to cover 10m before they can charge. Similarly, in terms of drive ways and right-of-ways Chorus only has to cover a buried lead-in of 15m vs 30m for other companies).

But why the slow up-take now, when Chorus connection is free?

One limitation is simply that fibre has only been run past a limited number of homes so far in keeping with the government's policy of prioritising other sectors.

But beyond that, Orcon maintains most people are simply unaware that fibre is now an option (to check out when it's coming to your address, a good place to start is the Broadband Finder on Crown Fibre Holdings' website).

It wants the government, or Crown Fibre Holdings, to run a TV campaign similar to one in Australia to promote the National Broadband Network.