Timing of split depends on deal, says Telecom

Paul Reynolds. Photo / Rotorua Daily Post

Telecom says its goal of structurally separating its business by the end of June will not be achieved as it was unable to sign a contract for the Government's ultra-fast broadband (UFB) project last year.

The company said yesterday that it would announce a revised timeframe for the structural separation of its business upon entering into a contractual arrangement with Crown Fibre Holdings for the UFB project.

In December, Telecom was confirmed as a negotiating partner for the UFB roll-out and it is now in detailed negotiations with Crown Fibre Holdings.

The company has proposed splitting into two separate companies as part of its proposed package for involvement in UFB.

"Based on initial timeframes for the UFB project, Telecom has previously indicated that it would aim to enact structural separation by the end of June 2011," said chief executive officer Paul Reynolds.

"However, that would have required Telecom to have reached a contractual arrangement with Crown Fibre Holdings last year for this timeframe to be achieved."

The final timeframe for demerger would be determined when Telecom was able to reach agreement for the UFB project.

Shares in Telecom closed up 1c at $2.28 yesterday.

- NZPA