NZ Govt approves Telecom assets split

Telecom demerger the most significant change to New Zealand’s telecommunications industry in two decades, according to NZ ICT minister

The New Zealand Government has approved the first major step in Telecom’s proposed demerger process, following the decision to agree to the national telco’s plan to split its assets after structural separation.

According to the nation’s minister for communications and information technology, Steven Joyce, the demerger was the most significant change to New Zealand’s telecommunications industry in two decades.

“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,” he said in a statement.

The telecom demerger will be voted on by shareholders later this year.

Under the separation, the telco’s network arm Chorus will become the major provider of fixed-line telecommunications to retail service providers, including Telecom.

The demerger will also allow Chorus to participate under the NZ government’s Ultra-Fast Broadband (UFB) initiative.

Anticipating the positive government decision, Chorus announced its proposed new executive management team last week.

The news of the management team selection follows just a day after Chorus kicked off construction of the UFB initiative following its contract win in May to deploy fibre in 24 of the 33 candidate areas.

The telco was finally selected by the company overseeing the rollout of the New Zealand National Broadband Network (NBN) equivalent, Crown Fibre Holdings (CFH), to take part in the project following months of negotiations.

To date, fibre optic cables have been deployed to Albany in Auckland, with more work scheduled to begin in Ashburton, Blenheim, Dunedin, Masterton, Napier-Hastings, Palmerston North, Rotorua, Taupo and Wellington by December.

Chorus will deploy and operate the network build to 69.4 per cent of the network’s coverage, with Enable Networks, Northpower Limited and Ultrafast Fibre Limited to cover the remaining 30.6 per cent by 2019.

Initial rollout will focus on connecting schools, businesses and health premises.

Follow Tim Lohman on Twitter: @Tlohman

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