The fastest internet service in the Southern Hemisphere has just been turned on in Dunedin.

Photo: Ian Telfer

The city won subsidised access to gigabit speed internet in a national social media competition, Gigatown, run by telecommunications company Chorus last year.

Chorus has upgraded the optic-fibre ultrafast broadband system in Dunedin to provide download speed of a gigabit of data per second, and is subsidising its service to bring down the retail cost to Dunedin businesses and households to about $100 a month.

At the official Gigatown switch-on launch this morning, the mayor Dave Cull said it was the start of a big opportunity for the city only limited by people's imagination.

Mr Cull said lightening fast internet would overcome the tyranny of distance for Dunedin, enabling it to become a global player in weightless, high-technology products.

Becoming New Zealand's first 'Gigatown' fit perfectly with Dunedin's plan to become one of the world's great small cities, he said.

At least 500 businesses and households were already signed up for gigabit speed internet and it could be 1000 by the end of the week.

Photo: Ian Telfer

However, Chorus said fibre cables to get access to what is being called 'the Gig' had only been laid to about half the city and it would not be fully installed until 2019.

Dunedin's Digital Community Trust also used the moment to launch an 18-month Gigatown implementation plan.

Photo: Ian Telfer

The Trust intends to open a Gigatown headquarters in April as a community hub to access the internet service, host workshops and showcase new technology.

The trust's chairperson Peter Hills said it was also planning for gigabit wifi hotspots and to work with Chorus on ways of accelerating the fibre roll out across the city.