KEY POINTS:
State-owned telco Orcon is happy with the slow uptake for its unbundled services offering fast broadband as Vodafone plans its launch into the fixed-line business.
Orcon - bought last year by Kordia - was the first to launch unbundled services when the first exchange at Ponsonby was opened.
Yesterday it began providing services to key customers in commercial parts of Auckland - Takapuna and the Auckland CBD.
The next exchanges to be unbundled are in Blockhouse Bay, Manurewa, Howick, Mt Eden and Remuera. But Orcon looks set to take a back seat once Vodafone and possibly other players enter the unbundled market later this year.
Parent company Kordia is investing tens of millions of dollars in a newly competitive market where it is seeking only a niche share.
Five weeks after launching New Zealand's first unbundled services, Orcon has fewer than 3000 customers for its high-speed ADSL2 broadband.
Apart from press releases, Orcon is not marketing its new super-fast internet and says it will be relying on "word of mouth".
Unbundling of the Telecom local loop - forcing Telecom to open its copper wire networks to competitors - was the central plank for years of lobbying.
Orcon chief executive Scott Bartlett said the specific uptake numbers were commercially sensitive because that would be useful for Vodafone.
Vodafone is starting its own services using unbundled exchanges in the next few months and is linking that to Vector fibre-optic services and to its mobile network.
And once Vodafone moves into the fixed-line business - which it will launch once Telecom has opened up more of its exchanges - it is expected to make a big marketing push.
Bartlett said that yesterday's unbundling of the Auckland CBD exchange in Airedale St - New Zealand's biggest exchange - would bring new customers.
Orcon has more capacity to service more customers but Bartlett said the company could not make a rapid increase while maintaining customer service levels. It was not a question of lacking a marketing budget.
"We do have the resources to have a large number of billboards in the Auckland CBD. But we are not going to do that when we are attracting good numbers - about 50 a day - by word of mouth."
Bartlett was relaxed with the progress and said the margins were giving Orcon a good return.
"They are a lot better than we were receiving before unbundling when we were reselling Telecom services."
