Dotcom's new site launches

Kim Dotcom's newly launched file-sharing site has struggled to keep up. Photo / Greg Bowker.

Kim Dotcom has laid out plans for free internet for all Kiwis while claiming huge international interest in his new Mega data storage and sharing website.

The tycoon - facing extradition to the United States to answer internet piracy allegations - spoke to media this afternoon saying he had just three hours of sleep in the day leading up to the launch of his new venture.

The site was launched at 6.48am - a year after Dotcom and three colleagues were arrested and charged with copyright violation.

Dotcom claimed 250,000 registrations within hours. He said the surge of interest initially caused huge capacity management issues.

The website offers cloud storage with a twist - it promises "on the fly'' encryption, meaning only those uploading data would ever know its contents. The site would effectively operate as a Swiss vault for secrets, with users controlling the knowledge of what it contained.

Dotcom said he hoped the success of the website would create jobs and growth in New Zealand but the ability to place infrastructure here was hampered by the single internet cable coming into the country.

"It is hindering New Zealand to be any kind of player in the internet game. At the moment there is a great wall shielding New Zealand saying `go away'.''

Dotcom said another cable would bring down the cost of internet use in New Zealand, which was far greater than overseas. Another cable would also allow him to host the data servers storing customer information in New Zealand, creating a huge stream of outbound internet traffic.

The weight of external traffic would allow New Zealand to charge the rest of the world, subsidising and potentially eliminating the cost of bringing data into the country.

Dotcom said there had been an unexpected number of Mega users who had sought out the paid-for premium accounts. Users who sign up for the free service get 50GB of storage space but premium accounts get faster transfer speeds, among other perks.

He also said he eventually wanted to list the company on the New Zealand Stock Exchange. However, he expressed concerns about being able to stay in New Zealand long-term, saying eventual success in his case might not be forgotten by the government agencies acting for the US government.