Monday, August 29, 2011

New Zealand Approves Telecom's Structural Separation Plan

The government of New Zealand approved Telecom New Zealand's plan to split its assets after structural separation. Telecom New Zealand's stock holders must vote on the plan.


Under the arrangement, Telecom's network arm (the New Chorus) will be the main provider of fixed-line telecommunications infrastructure and will be prohibited from offering retail services. The New Telecom will be a retail service provider and will compete on an even playing field with all other retailers.


"Should Telecom's shareholders vote in favour of the demerger, Telecom will be the first telecommunications company of its size to undergo voluntary structural separation," stated Steven Joyce, Minister for Communications and Information Technology.


  • Earlier this year, Telecom New Zealand submitted its offer to Crown Fibre Holdings (CFH) to participate in the nation's new, open-access, fibre-to-the-home network. Under the proposal, Telecom would structurally separate its access business and physical infrastructure.


  • The government of New Zealand has established Crown Fibre Holdings Limited (CFH) to manage its $1.5 billion investment in Ultra-Fast Broadband infrastructure with the goal of bringing Ultra-Fast Broadband to 75 percent of New Zealanders over ten years.


  • On 24 May 2011, the Government announced that Chorus was chosen as the Crown’s UFB partner in 24 out of the 33 regions, which represents around 70% of the UFB coverage area. The separation of Telecom’s retail business (New Telecom) from its wholesale / infrastructure business (New Chorus) is a prerequisite for Telecom to participate in the New Zealand Government’s UFB Initiative.

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