Govt gives Telecom leeway on separation

The Government has given Telecom leeway in its separation undertakings for the first time since they came into effect last year.

Communications and Information Technology Minister Steven Joyce yesterday agreed to the variations sought by the telco, saying he believed it would better meet the purposes of the Telecommunications Act than the existing undertakings.

"Variations to the separation undertakings were envisaged from the outset in order to accommodate changing circumstances," said Joyce.

The undertakings form part of Telecom's split into three operationally separate divisions - retail, wholesale and network arms - which came into effect early last year.

Joyce said the changes to the undertakings would delay milestones associated with delivering unbundled lines and backhaul on an equal basis to Telecom's competitors by six to 12 months.

But the variations would mean an improvement in the timetable for providing wholesale telecommunications services to other telcos.

A Telecom spokesperson said it was pleased with the outcome, saying it would mean a more sensible approach to implementing systems associated with the separation undertakings.

In a letter to the minister in March, chief executive Paul Reynolds said the company had identified a better approach to delivering undertakings relating to its wholesale arm.

"I do recognise that this is the first such request in the New Zealand context, and Telecom has accordingly gone to significant effort to consult with the industry and officials in preparation of it," said Reynolds.

In submissions to the minister, Vodafone, TelstraClear and Vector supported the change to Telecom's undertakings.