KEY POINTS:
Telecom has released its draft plan for undertaking the operational separation of its network, wholesale and retail units which has been ordered by the Government.
One thing is clear - the separation won't happen overnight. Telecom's timeline for reorganising its divisions to give the same access to its own business units and competitors alike, stretches out to 2011. But the ball starts rolling on Separation Day, March 31st, by which time Telecom has undertaken to have in place an access network services unit, separately run and branded differently to Telecom.
This unit will have a separate staff with a boss allowed a certain amount of autonomy from the Telecom board - for instance, the manager will be able to write out a cheque for up to $10 million for acquiring external customer contracts or $5 million for property purchases.
Staff who work at this unit won't have swipe card access into their old colleagues' offices in Telecom's retail wing any more. Similar conditions will apply to the separated wholesale division.
Telecom adheres to the Government's proposed timetable for separation in most areas but asks for an extension for a couple of things - introducing trading arrangements between the access unit and its own business units which don't currently exist and setting up policies and compliance procedures to keep its new house in order.
Telecom says it will have these things done by July 1 at the earliest or no later than December 31, 2008.
It's clear the separation is a big job, complicated somewhat by Telecom's concurrent plan to spend $1.4 billion upgrading its network.
The telco uses every opportunity in the document to highlight what a logistical nightmare the separation will be.
"The changes that Telecom commits to in this schedule are a massive task without parallel in the New Zealand market. This puts pressure on Telecom's resources, and obviously will take time... we need to get these changes right," the proposal reads.
Software re-engineering is clearly going to be a major task. Telecom apparently has 900 applications which talk to each other. In the provision of a broadband service alone, "30 different applications are engaged".
They all have to be re-engineered to allow for the equivalency that will put Telecom on a level playing field with its competitors when it buys services from its arms-length access unit.
A five-member independent oversight group will keep tabs on the access unit's dealings with all parties and submit an annual report which will be independently audited.
It all sounds very reasonable on paper, although phrases like "best endeavours" when it comes to timelines worry me.
Telecom has a history of dragging the chain when faced with change, lets hope it's written undertakings translate into action next year.
