Telecom wins concessions on copper network

Wednesday 13th October 2010

Communications and information minister Steven Joyce has approved a fourth variation to Telecom’s operational separation undertakings, which helps clear the way for New Zealand's biggest telephone company to participate in the government’s ultra fast broadband initiative.

In May Telecom proposed a number of amendments to its enforced three-way separation that would allow it to sidestep costly requirements which the telco claims will become redundant with the roll-out of UFB.

The variations mean Telecom no longer has to migrate its existing broadband customers onto the new wholesale broadband service; doesn’t have to create a new VoIP over copper service by December for its 17,000 existing customers; and no longer has to build a new set of wholesale operational support systems that are not consistent with the industry structure implied by UFB.

“I believe the changes will serve the best interests of customers and also allow Telecom to develop services and systems that are consistent with the changes being brought about by the ultra-fast broadband initiative,” said Joyce.

Yesterday Telecom said it is in the process of re-pricing its bid for involvement in the UFB initiative, and hopes to hear within weeks whether it will be chosen as a partner in the $1.8 billion government-sponsored project.

The head of the national telco’s Chorus unit, Mark Ratcliffe, told BusinessDesk the company has been “sharpening its pencil” since losing out in the first round of preferred partner choices, which were announced last month and went to three regional bids led by electricity network companies in Timaru, Whangarei and the Waikato.

Telecom chief executive Paul Reynolds also warned the company risks running out of the time to split itself into two companies – a key part of its UFB bid offer – if the government’s agent in the initiative, Crown Fibre Holdings, doesn’t announce choices in the next few weeks.

The operational separation undertakings, which had the effect of splitting Telecom into three separate business units, came into effect on 31 March 2008, with specific provision was made to allow for Telecom to apply for variations to the undertaking.

Telecom shares fell 0.5% to $2.02 yesterday.

Businesswire.co.nz

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