Orcon offers free local calls to lure firms

Orcon chief executive Scott Bartlett said Voice over internet Protocol technology will cut costs for small firms. Photo / Supplied

Government-owned telco Orcon is looking to boost customer numbers by offering cut-price phone and broadband to small-business owners.

The offer announced yesterday includes a second phone line Orcon claims is 50 per cent cheaper than Telecom, combined with free local calling and no fixed-term contract.

Customers are required to buy one of the company's phone and broadband packages which start at $69.95 per month. Calls to mobile phones cost 27c per minute and 9c per minute for toll calls.

The offer is available only to businesses in Greater Auckland and central Wellington - the focus of Orcon's local loop unbundling efforts.

It has been actively installing equipment in Telecom exchanges - local loop unbundling - for a year, moving customers to its own network rather than wholesaling broadband and phone services from Telecom.

Orcon chief executive Scott Bartlett said in 90 days a separate deal would be available to businesses in other areas.

Bartlett said it was the first time there had been real price competition for telecommunication services in the small-business market.

"For the first time ever you won't have to pay for local calls, which is a complete rort," he said.

The company is using Voice over internet Protocol (VoIP) technology to deliver the service, which, Bartlett says, is as easy as setting up a home broadband service.

"I really think this is a game changer," he said. "We're talking about ripping millions of dollars out of the costs for small business."

Bartlett said a mobile offer would soon be available to business owners when it launched a mobile service using Vodafone's network.

Previous to this announcement Orcon had focused its unbundling efforts on the residential market.

The costs of local loop unbundling begin to make sense for telcos only if they can attract significant customer numbers in the exchange areas they are targeting.