Telecom NZ submits final UFB bid
- 19 April, 2011 08:33
Telecom NZ (ASX:TEL) on Monday submitted a final binding proposal for its separation and participation in the government's Ultrafast Broadband (UFB) project.
The company said it had prepared the bid after months of negotiations with Crown Fibre Holdings, the company set up to conduct the wholesale-only fibre network rollout.
The proposal outlines Telecom's plans to separate its Chorus division into a standalone listed company that would help fulfil the government's requirements for the UFB of providing fibre coverage to 75% of New Zealand's population.
It involves rollout to the 25 regions not already covered by Crown Fibre's prior deals with local fibre operators and power companies.
Under the plan, Telecom NZ would move to meld its Chorus division with the rest of its wholesale operations before the demerger, and also reduce its executive team from eight to ten members
Telecom NZ chief executive, Paul Reynolds, said that after preparing the bid, the company will focus on getting ready for “the UFB environment, which will see us either demerging as the UFB partner or competing with new entrants in the access business”.
“The timelines are short for either scenario, so we must begin the work now, before the Crown has made its decision,” Reynolds said.
The head of Telecom NZ's UFB bid team, Mark Ratcliffe, will now also resume the role as CEO of the Chorus unit.
Analysts in February predicted that Telecom NZ was likely to pick up at least some of the contracts up for tender.
TEL shares rose 3.68 per cent on Monday's ASX trading to $1.550.