KEY POINTS:
The law relating to Telecom's split, aimed at increasing competition and service in the telco sector, would be in place by the end of the year, the Government said today.
The Government wants Telecom to split operationally into three units - network, wholesale and retail operations - to remove the ability and incentives for Telecom to discriminate against its wholesale customers.
Telecom says this is too costly and impractical, and in April put up an alternative structural separation, selling its network assets to the Government or private investors.
Today, Communications Minister David Cunliffe said the Government wanted to act quickly, and would talk to Telecom about its plan to sell off parts of the network.
"The government agrees that there is potential for structural separation to provide additional benefits under certain conditions," he said.
"But we are also conscious of the need for rapid progress to provide the industry, including Telecom, with the certainty they need to move forward with confidence."
If no acceptable alternative to the Government's plan was decided on within two months, it would proceed with its original proposal.
Telecom's new chief executive Paul Reynolds does not officially step into the job in late September.
"My expectation is that the statutory requirements for operational separation should be able to be completed by the end of this year," Mr Cunliffe said.
The Government would not revisit the recently updated Telecommunications act, which it said was sound and based on world best practice.
Telecom said previously that the Government's separation plans would limit its ability to invest in infrastructure, and if the plan went ahead it would invest only $500 million of the $1.5 billion needed to upgrade the nationwide copper phone network.
Shares in Telecom rose 4c to $4.66, having traded between $3.93 and $5.15 in the last year.
- NZPA
