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Last-minute changes to staff incentives under Telecom's planned split could be to the detriment of opening up the industry to greater competition, industry and user groups say.
Telecom is finalising the details of a Government-imposed separation which will see it create three separate business units - retail, wholesale and network divisions - before "separation day" on March 31.
Submissions on the voluntary undertakings by Telecom from the Telecommunications Users Association (Tuanz) and internetNZ expressed disquiet that performance incentives for senior Telecom staff continue to bias them towards favouring Telecom over other telcos.
Industry reforms over the past year have focused on creating a level playing field within the telecommunications industry whereby rival internet companies can purchase Telecom services on the same footing as Telecom's own divisions.
Tuanz said the structure and detail of the undertakings contained many features that motivated staff of the network and wholesale units to see their personal interests as connected to the interests of Telecom.
InternetNZ executive director Keith Davidson said he would like further information on why the Communications Minister, David Cunliffe, amended his determination just before Christmas to allow staff incentives to be linked to company-wide, rather than individual unit, performance.
"We're still firmly of the belief that in order for separation to work well you have to have the correct incentives in the correct places and this doesn't look to us to be a correct incentive in the correct place."
Telecom spokesman Mark Watts said while the company would not comment specifically on feedback, the draft undertakings were more rigorous, more comprehensive and involved a greater level of disclosure than anywhere else in the world, including British Telecom on which the proposed split was modelled.
Neither Tuanz or internetNZ recommended accepting Telecom's undertaking in its current form.
