| Telecom New Zealand to do the splits |
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| by Stuart Corner | |
| Wednesday, 26 September 2007 | |
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Page 2 of 2 • Strict governance and arms-length rules that enable the Telecom group to be managed consistently with a robust operational separation, including the ability for the Telecom CEO to direct units subject to transparency requirements. Featured Whitepaper
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• A requirement for Telecom to develop all necessary EOI infrastructure and transition all its services to that infrastructure within a four-year window. Telecom may propose migration plans for its legacy services to EOI compliant networks within four years as an alternative. Telecom NZ is required to complete its separation by 31 March 2008 when the determinations become legally enforceable. Telecom now has 20 working days to prepare its draft separation plan. The industry and the public will have an opportunity to comment on the draft plan in October. Telecom's chief operating officer technology and enterprises, Mark Ratcliffe, said that Telecom's planning for and work on operational separation was well advanced on a number of fronts. "Our initial assessment of the Determination indicates that it represents a demanding multi-year programme of significant change for Telecom and the industry. The next step is for Telecom to produce a detailed set of undertakings and implementation plan, and we will be focusing every effort on this for the next four weeks." He described the requirements as being "challenging though workable." And said that drafting of the separation plan and associated undertakings over the next few weeks would be "a demanding task for the legal, technical and other teams at Telecom, all of whom are already working hard on a range of other regulatory requirements, including delivery of regulated broadband services." He said the final Determination did not change Telecom's tentative view on the financial costs associated with operational separation. "As we indicated on 3 August when our 2006/07 result was published, compliance with operational separation is likely to cost Telecom around $NZ200 million in capital expenditure over the next four years, with operational costs of up to $NZ40 million per annum over this same period.{moscomment} |
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