Telecom has confirmed its proposal to structurally separate in order to participate in the government’s billion-dollar urban and rural broadband initiatives.
Bidders in the Ultra Fast Broadband proposal were required to submit refined proposals to the government agency charged with overseeing the process, Crown Fibre Holdings. Telecom has made parts of its proposal public this afternoon.
In a media statement Telecom CEO Paul Reynolds outlines how Telecom would participate. “Our proposal is predicated on the structural separation of Telecom, through a demerger into two companies which would give rise to Chorus2 as a new and entirely standalone company,” Reynolds says.
“This would be a significant event for our company and would radically transform the telecommunications sector in New Zealand. A significant structural change to Telecom’s business would require 75% of the shares that are voted to vote in favour of the demerger proposal.”
In line with the CFH process, Telecom’s bid is confidential, however Reynolds says Telecom is proposing that ‘Chorus 2’ could deliver on both the urban and rural inititaives.
“We have also proposed integrating the Ultra Fast Broadband initiative with the Rural Broadband Initiative. Integrating the two intiatives would allow for the extension of the reach of the Ultra Fast Broadband into rural areas well beyond the 75% coverage area,” Reynolds says.