Telecom NZ offers to split

Dylan Bushell-Embling
03 Aug 2010
00:00
News
Daily News

Telecom New Zealand has offered to structurally separate if the government accepts its bid to participate in the NZ$3 billion ($2.2b) ultrafast broadband (UFB) project.

But in return, the government must agree to relax regulations.

Under the company's proposal, it would demerge its wholesale and infrastructure units, giving rise to the creation of Chorus2 as a standalone company.

Telecom NZ CEO Paul Reynolds said that any move on separation would require the acceptance of investors owning at least 75% of the company's shares.

He said separation “would be a significant event for our company and would radically transform the telecommunications sector in New Zealand.”

But as part of the proposal, the New Zealand government would have to agree to release Telecom of some of the regulatory requirements fostered onto it after its privatization in 1990, Reynolds toldBusinessDesk.

The company was willing to be flexible, but the government would have to bring some form of regulatory change to the table, he said.

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