Defiant Gattung puts cards on the table

Theresa Gattung, with Marko Bogoievski, said Telecom was in limbo. Picture / Mark Mitchell

It has been dubbed a career-defining speech.

Telecom chief executive Theresa Gattung arrived to take on the Government with a nervous flush on her face, dressed in a demure black outfit.

She was flanked by her key executives, defiant, hands firmly clasped across her chest.

Gattung yesterday presented Telecom's submission on the Government's unbundling legislation - the Telecommunications Amendment Bill - at Parliament House.

This bill is at the heart of the Government's plans to force Telecom to open its network to competitors and create a more competitive phone and internet market.

Gattung arrived in Parliament with chief operating officer Mark Ratcliffe, chief financial officer Marko Bogoievski and chairman Wayne Boyd.

They were quickly ushered through a packed crowd to the hearing room.

Committee chairman Shane Jones opened with a pointed quip: Gattung's speech would be "the most career-defining" of her life "so let's get on with it".

Unfazed, the Telecom chief said the company was "trying to get on" and make progress in the new regulatory environment.

She said Telecom's proposed operational separation, based on the Government's favoured British Telecom model, went further than the accounting separation proposed in the bill.

Under the model wholesale customers who used its network would get fair and equal access to fast internet services.

Opponents say Telecom's separation model is a watered-down model of British Telecom's and would not deliver on the Government's plans for the company.

Gattung was defiant and unapologetic throughout her speech.

"We want to make progress but we are hamstrung. What we are looking for is certainty, and the industry needs to know if it has Parliament's endorsement. We are in limbo, anything we can do to reduce that uncertainty the better."

Then after just five minutes - certainly not the longest speech of her career - she handed the floor to Ratcliffe, who heads the new wholesale unit.

He argued there were "strict Chinese walls" in place to ensure a level playing field for customers.

Bogoievski also spoke to the committee, saying Telecom was transforming from a traditional telephony model to communication services being delivered across an internet platform.

"The industry needs confidence to invest in Telecom," he said.

New Zealand was a small country that needed large-scale infrastructure.

"Larger players look at expected return and see whether it is worth pursuing. Most of Telecom's infrastructure is yet to be built. Whether it gets built goes entirely to the investment incentives."

National MP John Key asked whether there would be a difference in service between urban and rural areas with the new model.

"There is a real risk of that," said Gattung. "New services are rolled out in cities first. We are up for a conversation with Government about how the needs of New Zealanders will be met."

Key was hugely sceptical about the lack of detail that Telecom was revealing about the accounting for its separation model. "You are splitting the company in half, you must have a good idea about what that will look like," he said. Gattung said the company had growth targets in place but did not want to reveal specific detail about the accounting split between wholesale and retail.

Key was furious. "You cannot tell us how large the wholesale sector will be?"

Green MP Nandor Tanczos asked what accountability would be in place for the wholesale unit.

Bogoievski said: "It doesn't have its own balance sheets, but we are asking the commission to endorse transparent reporting."