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Bill Bennett

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Fly Air Orcon for business class broadband

Orcon is trying something different. It plans to ask customers to pay $15 more each month to get business class service.

This is a smart idea.

For years, New Zealand broadband competition was all about price. In recent years there have been content bundles. Buy a service and get free Netflix or half price Amazon Prime.

Sky turns this recipe on its head. The company sells lower cost broadband to customers buying its content.

Until now, that’s been about it for broadband competition: a relentless focus on having the lowest price. It’s competitive to the point of companies competing away most of their profits

Competitive but one dimensional

It wasn’t meant to be this way.

When New Zealand’s fibre network was starting-up, one of the big questions was “how will the players compete”.

The Ultrafast Broadband network is open access. That means there’s a wholesale level and a retail level. Wholesalers cannot compete with retailers.

Chorus, Northpower, Enable and UFF are the four wholesalers. They each have a monopoly in set areas.

There’s another important rule behind UFB: the wholesalers can’t play favourites. They must offer the same terms to every fibre retailer.

Undifferentiated

This means, in effect, fibre internet service providers all sell the same thing. There are nuances about how they set up backhaul and buy international links.

Yet on the whole a Fibre Max plan from one ISP is much the same as a Fibre Max plan from another ISP. In marketing-speak, the options are undifferentiated.

One of the obvious ways to differentiate this fibre ISP from that ISP is to offer better customer service.

This should be easy enough. We all know what good customer service is. And companies know how to provide it. The problem is that it comes at a cost and that’s an issue when margins are pared to the bone.

Orcon has pulled this part of its product offering out, shined it up, and sells it as an option add-on.

Orcon Priority Support

For an extra $15 a month Orcon’s Priority Support customers get pushed to the front of the queue. If there’s a problem, Orcon will send an on-site technician within a day.

On paper this resembles the service offered to motorists by the AA.

For this to work, Orcon has to keep its word. The idea will collapse in days if a forum like Geekzone is full of angry customers who paid the premium and had poor support.

At the same time, Orcon needs to make sure the customers who don’t pay for Priority Support continue to get decent treatment, although not as good as those who pay the premium. If everyday support degrades as a result of this initiative, the company’s reputation will take a hit.

While this idea is original for consumers, it’s in line with what business customers who pay premium prices can expect.

Orcon puts residential on equal footing with business

And that’s the other part of Orcon’s pitch. Orcon chief executive Taryn Hamilton says the company has scrapped the distinction between business and residential customers.

You could look at it as unbundling the distinction.

Orcon has other ideas that differentiate the company from many rivals.

It is one of a handful of ISPs to offer customers Hyperfibre. This is the Chorus product that lifts fibre speeds. There’s a new 2Gbps Hyperfibre option. Orcon will continue to sell 4Gbps Hyperfibre and from early next month will offer an 8Gbps service.

The Wi-fi Pro option promises to give customers a strong wireless network signal throughout their home. Hamilton says the company checks out the size of a customers property and sends enough Google mesh Wi-fi units to provide blanket coverage.

Orcon also has a 4G failover option. Should a broadband connection go down, this will automatically switch to a 4G mobile network. Vodafone offers a similar 4G failover product called the Ultra Hub Plus.

Like Hyperfibre and Priority Support, the 4G network backup is a product that would, in the past, be offered to business customers.

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