Kordia sells Orcon

Kordia sells Orcon

Kordia has sold its residential and business ISP arm Orcon to a group of New Zealand investors headed by Warren Hurst, executive director of Vivid Networks.

Vivid is a small New Zealand ISP and part of Vivid Solutions, which provides teleconferencing systems for businesses. Hurst says Orcon will appoint a new chief executive in the near future and Orcon customers can expect business as usual from the ISP.

“The business is in good shape. It has a sound technology platform and quality staff. We will soon be announcing the appointment of a new CEO. At that time we will discuss our growth strategy going forward,” says Hurst.

Kordia purchased Orcon in 2007 for $27 million. Asked to put a dollar figure on this sale, a Kordia spokesperson said she was unable due to commercial sensitivity.

Last year Orcon was integrated into the main Kordia business, absorbing with it several Orcon staff at its HQ in Auckland.  Kordia says there will be no job losses as a result of the sale for either Kordia or Orcon, with staff expected to go back to their newly separated business units overnight.

Kordia New Zealand chief executive Scott Bartlett says the sale lets Kordia focus on its strength, which is network infrastructure for large businesses.

“Kordia is fundamentally a B2B business, so being able to reset our strategy to better focus on delivering exceptional service to our business customers is really where we need to be,” he says.

The sale was finalised last Friday and comes month after the telco confirmed it was in discussion to offload Orcon, although rumours of a sale persisted for months before that.

At the time chief executive of TUANZ Paul Brislen, said telcos in the tier below Telecom, Vodafone and TelstraClear (which is now a part of Vodafone) are having a difficult time running their businesses because of the small size of New Zealand's telco market.

"The tier two players I've spoken to have said there's no money to be had at this level... There was an expectation that when Chorus unbundled and work on UFB began, their margins would improve on copper services," he says.