Telecom's asset split plan has been approved by the Government. Photo / Greg Bowker
Telecom's asset split plan has been approved by the Government. Photo / Greg Bowker
The government has approved Telecom's plan to split its assets after structural separation - the first major step in Telecom's proposed demerger process.
Telecom's Asset Allocation Plan identifies how assets and liabilities will be split during Telecom's proposed demerger and the key terms of all intended material sharing arrangements.
Communicationsand Information Technology Minister Steven Joyce said the approval of the plan "kick-starts the most significant telecommunications industry change in the past 20 years."
"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."
Under structural separation, the new Chorus will be the main provider of fixed-line telecommunications infrastructure and there will be an even playing field between all retailers including the new Telecom.
Telecom has proposed to structurally separate in order to be able to participate in the government's $1.35 billion ultra-fast broadband initiative. This means that Chorus will not be able to offer retail services.
The Telecom demerger is subject to a shareholder vote later in the year.
