Key Points:

Internet brand ihug is no more after a decision by owner Vodafone to bring the business under its own banner.

The change marks the end of almost 15 years of the ihug name in the New Zealand telecommunications market.

Using an $8000 loan from their father, brothers Tim and Nick Wood founded the internet Home Users Group, ihug, in 1994 (the name is also credited to their father) selling it 10 years later to Australian-based iiNet.

Global mobile giant Vodafone bought the company from iiNet for $41 million in 2006.

Since then the businesses have retained distinct brands with chief executives overseeing the two operations - Mark Rushworth as head of internet-and-landline focused ihug and Russell Stanners for Vodafone.

Rushworth said the move to fold the ihug brand supports the Vodafone vision to be the number one telecommunications provider in New Zealand.

Vodafone began offering fixed-line phone and broadband deals alongside its mobile services in August last year.

At the time Rushworth denied Vodafone's move into broadband meant the ihug brand would be abandoned.

"This is leveraging that expertise across our Vodafone customer base using the Vodafone brand that is being supported by that ihug capability," Rushworth said then.

Company founder Tim Wood said while is was inevitable Vodafone would seek to merge the two brands, he was sad to see ihug disappear from the internet landscape.

"It's something that I've made and built myself with my brother and put a lot of time and energy into it, but all things come to an end," said Wood.

Since selling up, company founders Nick and Tim Wood have both moved away from the world of technology into property investment.

Nick runs Distinctive Holiday Homes, a company offering luxurious timeshare homes and yachts, and Tim operates an Auckland-based property management company Property Star.

Yesterday Rushworth said the time was right to discontinue ihug in the market, despite it having strong brand recognition. He said 50 per cent of people surveyed by Vodafone last year recognised the company now sold more than mobile services.

Rushworth said it wasn't envisaged that there would be staff losses as a result of dropping the brand but in the long term the company may move from its Newton Road address to join Vodafone in its Viaduct base.

Rushworth's job as ihug chief executive will disappear and he will oversee the brand switch to Vodafone as part of the executive team.

Current ihug customers will be able to keep their email addresses or move to a Vodafone-based address.


August 1994: Brothers Nick and Tim Wood set up the internet Home Users Group (ihug) with a Commodore 386 PC and a loan of $8000 from their father, John.

March 1995: Launch $39-plus-GST a month flat-rate internet access.

August 2002: Nick Wood steps down from day-to-day running of ihug and moves to Fiji to run his Octopus Resort.

September 2003: iiNet buys ihug for $81 million.

Oct 2006: iiNet sells ihug to Vodafone for $41 million.

April 2008: ihug brand will cease to exist.