Consolidation gathers pace as Orcon buys up rural ISP

24 Apr 2006

New Zealand’s fifth largest internet service provider (ISP), Orcon, has acquired rural internet provider Wise Net, turning up the heat on industry consolidation in the country’s internet sector. New Zealand is home to more than 60 ISPs, most of which are tiny, and analysts expect consolidation to intensify once the government revises competition rules by mid-2006. Earlier this year, number three provider iHug seized Quik Internet and has promised to acquire more ISPs if the state goes ahead with plans to unbundled Telecom’s local loop.

Financial details of the purchase of the Masterton-based ISP, which is a relatively small player with 3,000 customers and six staff, were not disclosed, but Orcon said the transaction was about acquiring a quality company rather than adding sheer customer numbers. ‘Industry consolidation is just a natural part of telecommunications at the moment,’ said Scott Bartlett, general manager of regulatory affairs at Orcon. The new owner has close to 20,000 broadband customers, ranking it fifth in high speed internet provision behind Telecom’s Xtra, TelstraClear, iHug and CallPlus. Around 40% of Wise Net’s customers are on broadband, with the remainder on dial-up. The acquisition forms part of Orcon’s strategy to expand into rural services. In the next few weeks it is looking to launch further rural broadband services on the Thai-owned IPStar satellite.

New Zealand, Spark