Telecom New Zealand shareholders have voted to approve the structural separation of the company, with 99.8% deciding in favour of the large-scale operational demerger. The news was reportedly broken to shareholders at the company’s Annual General Meeting at the Sky City convention centre in Auckland earlier today. Stuff.co.nz quotes chief executive Paul Reynolds as saying: ‘The shareholder vote marks a critical step in the creation of an entirely new structure for the telecommunications industry in New Zealand. We are very pleased to have received our shareholders’ consent for this significant step, and Telecom’s focus is now on the swift enactment of the split, along with ensuring both companies are well positioned as New Zealand moves into the fibre future’. The legalities of the separation are due to be completed by 30 November.
As noted by TeleGeography’s GlobalComms Database, Telecom’s imminent structural separation has been necessitated by the company’s selection by government agency Crown Fibre Holdings (CFH) to roll out the bulk of the country’s Ultra Fast Broadband (UFB) initiative. In May 2011 Telecom was awarded contracts covering 24 urban areas (including Auckland and Wellington), effectively bringing the long-running selection process to an end. As part of the agreement Telecom agreed to structurally separate its infrastructure business unit, Chorus, from the rest of the company. Going forward, Chorus will operate as a nationwide fixed line access network operator, offering services on an ‘open access’ basis, whilst ‘Telecom’ will function as a retail-focused telecoms business, comprising fixed, mobile and ICT operations.