Unbundling good for all ... even Telecom, says TelstraClear

TelstraClear's chief executive Rosemary Howard says Telecom shouldn't be opposed to unbundling the local loop as it will be of benefit to all concerned. Her comments come as the Telecommunications Commissioner extends the provisions of his inquiry into unbundling.

TelstraClear's chief executive Rosemary Howard says Telecom shouldn't be opposed to unbundling the local loop as it will be of benefit to all concerned.

Her comments come as the Telecommunications Commissioner has extended the provisions of his inquiry into unbundling and will release his draft report on September 18. (See Commissioner extends scope of unbundling inquiry.)

Howard says unbundling will mean Telecom gets a slightly smaller slice of a much larger pie.

"They'll lose a bit in retail sales, but they'll more than make up for that in wholesale."

Howard says TelstraClear is "encouraged" by the commissioner's extension to the investigation and she hopes it means he will "get it right first time".

"It has to be done quickly, it has to be done right first time. We're already so far behind everyone else - there's only Mexico and New Zealand that haven't unbundled. Even the former Czechoslovakia has unbundled its local loop." Howard says New Zealand can't afford to wait any longer for unbundling.

"It's unquestionably important to the economy. The lack of broadband is costing around 3% of GDP each year - that's $4 billion."

Howard says Telecom is worried that unbundling will adversely affect its revenue lines and shareholder value, but quite the opposite is true.

"By unbundling and allowing competition we drive uptake of broadband and Telecom will see the benefits of increased revenue and increased share price."

Telecom's general manager for government relations, Bruce Parkes, says Telecom is not surprised by the extension, although it comes quite late.

"The draft report must be well underway by now. This is really the ratification of the broad approach to unbundling the commissioner has taken all along."

As Computerworld Online reported yesterday, the commissioner has extended his review of unbundling to include more of Telecom's network, including backhaul services (from the exchanges to Telecom's backbone network) and co-location of services.

Parkes says the unbundling issues paper released in April discussed more than simply the local loop as defined in the Telecommunications Act.

"The act says the local loop runs from the user's premises to the local exchange but the review has always been about more than just that."

The commissioner will report back to government by the end of the year. The government is under no obligation to accept the commissioner's recommendations.

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