Orcon is spending about $5 million to install its own equipment in five Telecom exchanges in Dunedin, a process known as local loop unbundling (LLU).
LLU is the regulatory process allowing multiple telecommunication companies to use the connections from a telephone exchange.
Orcon chief executive Scott Bartlett is enthusiastic about the prospect of being able to provide customers with his company's own network around this city, and other centres around the country.
The capital expense of building a local network in the city meant there had to be an economy of scale, with enough customers to justify the expense.
"Orcon is a small company. We are still small, but we are getting bigger.
"We need the customers to expand our services and we have reached the tipping point in Dunedin.
"The hardest part of growth is the economy of scale. Once we get there, we will attract other customers."
Orcon already operates in Dunedin, on-selling services through the existing Telecom network.
Mr Bartlett said that once the Orcon network was running, broadband speeds would be twice what they were now and prices would go down across the city.
That had been the response in other cities where Orcon had launched its own network and he expected the same reaction in Dunedin.
Auckland customers paid less than those in Dunedin, but in Dunedin Orcon had to resell Telecom's products.
"Once we build our own network, prices will drop. Price and speed, that's what we offer."
The past 12 months had been fascinating to work in, he said.
The telecommunications industry had shrunk during the recession, as it normally did.
If the economy grew, so did the telco industry, but in the past two years the industry had contracted about 3%.
Orcon had doubled in size every 18 months, the fastest growth of any telco in the country, he said.
That growth had come at the expense of Vodafone, TelstraClear and Telecom.
"We are now seen as a competitor to the big guys. We have been highly successful in unbundling the local loop."
Around 20% of Auckland houses were now Orcon customers.
That company model would be replicated in Dunedin, but Orcon was also unbundling exchanges in Hamilton, Tauranga, Nelson and expected to be working in Invercargill before the end of the year, he said.
Launching a mobile service was the latest innovation and the company was finally making money after several years of losses, he said.
Orcon offered no fixed-term contracts for either its broadband or mobile services, something not matched by other companies until this week when Vodafone offered a SIM-only mobile plan with one-month terms.
"I take the view that I don't have a contract with my energy supplier, so why should I have one with my telco.
"Contracts say to me that we don't trust our customers."
Contracts locked customers out of new technology and locked them into bad deals, Mr Bartlett said.
A good deal now could be a bad deal in six months.
Orcon wanted people to use technology, make more phone calls and use more data, but two-year contracts, which cost a lot of money to break, prevented customers from doing that.
Good service meant customers would not leave a provider.
"We take the view that if you give a customer good service and provide good value, they will stay.
"We want customers, not prisoners."
Customers did leave Orcon, but the company always tried to put right any grievances.
Mr Bartlett realised early on Orcon could not outspend the larger telcos and that Orcon could not "out-tech" them forever.
However, it could outsmart them and it was helpful being smaller, because the company could often move faster than its competitors.
There had been a culture of innovation throughout the company and Orcon had played to that strength, he said.
Also, it had played on its New Zealand ownership, through Kordia and its New Zealand-based call centre, to get people talking about the company.
"We can't buy more television ads than our competitors, but word-of-mouth advertising is more cost-effective and faster for us."
Telcos around the world were usually awful companies and tended to be "very old school", with engineering-based cultures, he said.
Customers were regarded as an annoyance and only there to make the companies rich, Mr Bartlett said.
Customers had to trust brands and companies had to build a culture around the basic principles of delivering to customers.
"If you don't love the customers, you don't eat."
Mobile was a natural progression for the company.
It was using Vodafone towers to install its own electronics rather than pay $500 million to put another network of towers around the country.
Having both mobile and broadband services throughout the country would allow Orcon input into changing the industry.
It could have sat outside and watched developments, but Mr Bartlett said he preferred to be on the inside to drive some of the changes.
The 2degrees mobile company had done a good job in driving changes for pre-paid services and Orcon hoped to have the same impact with its post-paid services.
"We hope the big boys will sit up and take notice."
