KEY POINTS:
Wayne Boyd yesterday softened some of his criticisms of the Government's plan to reform Telecom, indicating that the company could work under operational separation.
Three months ago, the Telecom chairman described the operational separation plan to divide the company into three business units - retail, wholesale and network divisions - as unworkable.
"We are quite staunch about this - their proposal won't work," Boyd told an audience at its third quarter results briefing in June.
Yesterday, Boyd said the company was having "meaningful and fruitful" discussions with the Ministry of Economic Development.
"We are confident with the tone of the talks that we believe when the minister does make his determination that we will be in a position to move quickly to deliver on the operational separation requirements that he has."
Boyd said discussions currently centre around operational separation but it is intended to discuss structural separation - the company's preferred model which involves selling off the network - as part of the talks.
Boyd said he anticipated being able to submit a workable separation to the minister before the end of the year.
Telecom's results come the same week newly appointed Telecommunications Commissioner Ross Patterson made his first ruling setting draft prices for local loop unbundling - opening up access to the copper lines running from local telephone exchanges to homes and businesses to Telecom's rivals.
Acting chief executive Simon Moutter said the decision to have two separate unbundlings prices - $16.49 a customer a month for urban areas and $32.20 for rural areas - was a surprise to the company, but added that Telecom could find a way to support having either two prices or one average price.
"The key point to note is the local loop unbundled price is really the determinant of the revenue line for the separated access network services business," he said.
"That's what ANS [Access Network Services Unit] sells in an operationally separated environment, it sells LLU to Telecom and to the Telecom Wholesale business for sale onward to other carriers."
The commission made a second draft determination yesterday, recommending further regulation of the market in order to open the way for a third mobile phone company.
