Cool response to Telecom sale in light of Kiwi Share

By RICHARD BRADDELL telecoms writer

The Government has told Telecom that any plans it may have to sell parts of its local network would have to be considered in the light of the Kiwi Share.

Telecom said it might want to sell parts of its network during negotiations leading up to the pre-Christmas release of the Government's telecommunications policy.

Some electricity companies have suggested they might like to take on parts of Telecom's rural networks, but Ministry of Economic Development officials have been cool to the idea. This was shown in ministerial advice tendered before the policy announcement released by Communications Minister Paul Swain under the Official Information Act yesterday.

Officials said Telecom should be given no general right to sell or transfer its local area networks, including its Kiwi Share obligations, since the benefits were likely to be relatively low.

"This proposal would also create risks for the Crown in assessing the financial viability of the proposed transfer," an official's report stated.

"And it would require the Crown to monitor the performance of a number of companies in complying with the Kiwi Share obligations."

Economies of scope that might be achieved by transferring the obligations to power companies might be achieved as easily by contracting out.