Structural separation of Telecom NZ on the cards

Stuart Corner
Wednesday, 15 September 2010 16:19

IT Policy - Government Tech Policy

Structural separation of Telecom New Zealand has become very much a live issue with release by the Ministry of Economic Development (MED) of a discussion document outlining its initial thoughts on regulatory changes that may be required if Telecom structurally separates.

The move is in response to an offer from Telecom NZ to structurally separate as part of its August 2 proposal to provide the government's Ultra-fast Broadband network (the equivalent of Australia's FTTH NBN). Telecom said was reviewing the discussion paper.

"The proposal is a package of structural separation, co-investing with the Crown to achieve the 75 percent UFB coverage objective by 2019, integration of the RBI to extend the reach of fibre into rural areas and regulatory and legislative change," Telecom said.

Telecom CEO, Paul Reynolds, said: "There remains a long way to go in the UFB tender process and finding a solution for UFB that achieves the government's objectives while also being sustainable and economic is challenging. It will also be complex and challenging to arrive at a solution that will receive the necessary support of Telecom shareholders."

The extent of debate into the possible structural separation of New Zealand's former monopoly telco contrasts starkly with the views of Australia's new communications minister, Malcolm Turnbull, who yesterday denied there was any need for such a move in Australia.

New Zealand's communications minister, Steven Joyce, said: "To assist the government in its consideration of any issues that might arise, we are seeking input from the industry and interested parties at this stage of the policy development process. Should Telecom decide to structurally separate, any changes to the regulatory regime the government may adopt would be robust and well-informed and tested by the industry and key stakeholders."

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