[x-pubpol] NZ: structural separation achiebved

[Joly MacFie]

http://www.telecomtv.com/comspace_newsDetail.aspx?n=48171&id=e9381817-0593-417a-8639-c4c53e2a2a10


According to New Zealand Telecom chief executive, Paul Reynolds as reported
in leading New Zealand newspaper, The Otago Daily
Times<http://www.odt.co.nz/news/business/183983/shareholders-vote-telecom-split>:
"The company had been subjected to more regulation that had been "more
intensive, prescriptive and more detailed'' than in any other country or
market in the world." But now, reports the ODT, Telecom looks set to put
years of regulatory uncertainty behind it after shareholders voted
overwhelmingly in favour today of splitting New Zealand's biggest listed
company into two separate businesses.

Subject to final court orders, Telecom will "demerge'' its fixed line access
infrastructure business, Chorus, to enable Chorus to take a leading role in
the government's ultra-fast broadband (UFB) initiative, effective from
November 30, by which time the company is expected to be a separately listed
entity.

Reynolds told the ODT: "We have had three revised industry structures in the
last five years, with far-reaching consequences for Telecom and you as
shareholders, in terms of the mandated requirement to invest substantially
beyond what we would do through commercial logic,'' he said.

Regulation had acted to divert management time away from competition and
towards compliance and throughout the period of government-imposed
operational separation from 2008-10, Telecom's rate of capital investment
was nearly double that of comparable telcos overseas, he said.

"The influence of regulation on our company has been a key part of our story
over the years, and in many ways has brought us to the decision that
shareholders face today,'' he said.
One of the most significant challenges to overcome was the Government's
requirement that no company selected through the tender process could both
own infrastructure and sell services to residential and business customers
directly, as Telecom does today.
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Joly MacFie  218 565 9365 Skype:punkcast
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