KEY POINTS:
Telecom has offered faster delivery of local loop unbundling as part of its proposal to the Government for operational separation.
A timetable for unbundling in Telecom's submission is three months ahead of the Government plan.
Under Telecom's proposal, trials would begin in July with a full launch in December, as opposed to March next year under the Government plan.
Local loop unbundling will allow Telecom's rivals to access its network to provide their own services.
Chief operating officer Mark Ratcliffe confirmed it might be 16 months before customers got a full national commercial service but said Telecom was willing to move faster.
"We understand the implications of putting dates forward like this. These aren't just things to keep people happy and make our submission look good. These are commitments. We are prepared to stand by them but we need some signals to say this is a priority."
Telecom had until yesterday to comment on a Government plan to split the company into retail, wholesale and network units to open the telecommunications industry to greater competition. It has responded with a proposal to put its network assets into a separate company which it would not necessarily own.
Ratcliffe said Telecom's submission gave some detail without appearing inflexible and was better than a "draconian" form of complex separation proposed by the Government.
He said it was better to focus on the fast delivery of regulated wholesale broadband services and a simple form of separation. "We really hope the Government will see this as a better blueprint for going forward."
Chairman Wayne Boyd said the Government proposal was "fundamentally unworkable" and would tie the industry up with excessive regulatory complexity and cost.
Telecom would suffer a $1 billion shortfall in investment funding because of the current and proposed regulatory regime squeezing the available return on investment.
"In real terms it will mean 50 per cent of New Zealanders will get fast broadband access, but not the 90 per cent the Government wants ... no company can invest if the returns are too low and the risks are too high."
Graham Walmsley of CallPlus said Telecom would not sit back refusing to invest in the network and let competitors "eat their lunch".
"Our belief is that competition will drive them to invest."
The Government needed to put some firm undertakings on Telecom towards progressing separation and local loop unbundling in unison.
"Certainly any lengthy dialogue around Telecom's 11th-hour model is not going to progress things quickly."
Tom Chignell, general manager of commercial development at Vodafone, said the company did not have a view on whether it should be an operational or structural split - it was more interested in the result.
"We'd prefer an imperfect LLU [local loop unbundling] earlier than a perfect one later."
CallPlus wants big telcos banned from auction
Vodafone refutes claims it will use its deep pockets to block smaller telcos from buying wireless broadband spectrum.
Vodafone general manager of commercial development Tom Chignell said the fact that it was an auction meant anyone could make the highest bid.
"I think what's behind this is perhaps a wish to reduce the intensity of the bidding ... I think what's coming out is some of these players don't want to pay full market rates for this spectrum."
Graham Walmsley of CallPlus said spectrum was a scarce resource that wasn't readily available and the 2.3 gigahertz spectrum was critical because of its use for Wimax technologies.
He said Telecom and Vodafone would use their financial resources to block out the spectrum for up to five years before the "use or lose" clause kicked in.
Walmsley would like to see both companies made ineligible to bid in the approaching spectrum auctions.
CallPlus is at present trialling Wimax services in Whangarei.
The Government brought forward the auction of the 2.3 gigahertz spectrum to allow telcos to plan long-term investment in Wimax technologies.
Rights to the spectrum, which expire in 2010, are held by state-owned broadcast and telecommunications infrastructure operator Kordia, Telecom, Sky TV and Woosh.
Woosh last year added to its allocation by buying spectrum from Telecom and Sky TV.
