Telecom split

28 Nov 2006

A New Zealand government select committee is recommending that dominant telco Telecom New Zealand divide its operations into separate units for retail, wholesale and fixed networks. The Finance and Expenditure Select Committee has been studying the Telecommunications Amendment Bill which was introduced to Parliament in June. The reorganisation of Telecom is one of the key components of the proposed Bill. Telecom had hoped that an accounting separation of its wholesale and retail operations would suffice, but the committee said in its report that ‘it would be difficult to guarantee a ‘Chinese Wall’ between entities that are not operationally separate’. Telecom greeted the recommendations with a statement which said the proposal was: ‘Not ideal, but we will do our best to work with it.’ It added: ‘This form of separation is more complicated and costly than we believe is necessary for New Zealand but we will work to implement it as swiftly as reasonably possible.’

New Zealand, Spark