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Telecom's plan to split its network assets into a new company is not as straightforward as it appears and will require lengthy discussions and more legislative changes, says a rival telco.
In its submission to the Government on the operational separation of Telecom into three business units, Australian-owned TelstraClear said the structural separation proposed would not be a "simpler exercise".
Telecom is being forced by the Government to split into three operating units and open up its networks to telecommunications rivals.
The company prefers a three-way split which would see the retail and wholesale units operating separately under the Telecom banner, but the network assets in a separate company.
In an outline of its plan released two weeks ago, Telecom described its proposal as "a simpler separation model so resources can focus on faster delivery of local loop unbundling".
But TelstraClear said: "The proposal may be 'simpler' in that it results in an independent entity with its own commercial objectives and is outside Telecom's direct control.
"This does not, however, remove the need for ongoing measures to ensure separation is effective."
It said Telecom's proposal came too late in the decision-making process and the Government should reject it. It was concerned the sale of Telecom's network assets into a separate company would require lengthy Government discussions and more legislative changes.
"This means much of the work already done by decision-makers and stakeholders might need to be reconsidered, re-consulted and re-decided."
It also said the process of structural separation would require the valuation and transfer of assets and the establishment of new commercial contracts with Telecom.
The Telecommunications Users Association of New Zealand chief executive, Ernie Newman, said he did not offer unconditional support for Telecom's plan, but was attracted to the "left-field" offer.
Telecom shares closed up 4c at $4.83.
