Telecom NZ presses govt over UFB

Dylan Bushell-Embling
14 Oct 2010

Telecom New Zealand has warned it will need to reach an agreement with the government over its participation in the Ultrafast Broadband (UFB) project within weeks.

The company will need to reach a heads of agreement in the next few weeks if it hopes to meet its self-imposed deadline of structurally separating the company by the middle of next year, CEO Paul Reynolds has told the NZ Herald.

Splitting its wholesale and retail divisions is a condition of Telecom NZ's participation in the NZ$3 billion ($2.27b) project to roll out a fiber network to 75% of the population. The demerger process would take more than six months, he said.

Any agreement with the government “has to add up to something that looks favorable to shareholders because clearly demerger requires a vote,” he added.

One sticking point between the government and the carrier has just been resolved. Communications minister Stephen Joyce yesterday announced he had approved Telecom's application to revise its operational separation undertakings after Telecom modified the terms.

The revised undertakings, which have been agreed on by both parties, would give Telecom NZ more time to migrate its retail broadband customers onto an unbundled bitstream access service and voice customers onto a primary line voice service.

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