Opposition says government and Telecom are talking separation

Telecom says it can't confirm any separation discussions

Opposition ICT spokewoman Clare Curran is saying Telecom and ICT minister Steven Joyce have met and discussed the structural separation of New Zealand's biggest telco.

In a blog post today, tilted "The elephant in the room", Curran says word has it that Telecom is under pressure from the government to "have a good think about structural separation".

"I have it on good information that Steven Joyce and Paul Reynolds (Telecom CEO) met late last week. And that separation was on the agenda," she writes.

Telecom spokesman Mark Watts says Joyce and Reynolds meet from time to time "as you would expect", but he says he is unaware of any discussions about separation. "What could this mean?" asks Curran. "A separation between the retail side of the business from the wholesale/networks and access sides? Perhaps even more than that, structural separation may also release value for Telecom shareholders. A separate Chorus with an unencumbered mandate may well be able to make a more active (and more useful) contribution to national plans for broadband infrastructure rollout and access." Curran then goes on to give some free advice, writing that Telecom should "shift its attitude". "Our future lies in broadband, arguably the most important piece of infrastructure to be introduced this century. It’s more than telecommunications. It’s infrastructure. We must get it right. If that means that Chorus should separate from Telecom in order to become an infrastructure-based company, then so be it." She goes on to say voluntary separation is more satisfactory than legislation, adding that today's release of an invitation to participate in the government's broadband rollout means crunch-time is approaching. "I’m hearing is that the rate of return being sought by Steven Joyce’s government on it’s $1.5 billion investment is not do-able, she writes. "That the private sector is having difficulties justifying the investment it will need to make. In other words, the business model is flawed and possibly unsustainable. Which is a bit of a worry."

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