Another major step towards New Zealand's UFB future

Communications and Information Technology Minister Steven Joyce has welcomed today’s announcement that Telecom shareholders have voted in favour of proceeding with structural separation.

He says this is one of the final procedural steps in the roll out of ultra fast broadband to 75% of New Zealanders where they live, work and study.

The structural separation of Telecom paves the way for its network arm Chorus to be separated into a standalone company. Chorus is one of four companies rolling out New Zealand’s ultra-fast broadband network in partnership with the Crown.

Mr Joyce says structural separation is a major step for Telecom and is the most significant telecommunications industry change in the past 20 years.

“This has been a very successful process, which will result in ultra fast broadband services for New Zealanders at very competitive prices.”

Chorus will be set up as a wholesale-only provider of ultra-fast broadband, along with the Government’s other partners Enable Networks, Ultra-fast Broadband Limited and the Whangarei Local Fibre Company.

Around 70% of the ultra-fast broadband rollout will be provided by Chorus. It has already begun the rollout in Auckland and Wellington.

With the shareholder voting now completed, the process of separation is to be completed by way of a Court-approved demerger. This is expected to occur by the end of November.



Background

When Telecom bid for the ultra-fast broadband initiative in January 2010, it began the process of structural separation.

Negotiations with Crown Fibre Holdings took place throughout 2010 and early 2011, with the announcement of Chorus as an ultra-fast broadband partner in May 2011. Alongside this, the Ministry of Economic Development has carried out a significant process of amending the telecommunications regulatory regime to adapt it to structural separation.

The Telecommunications (TSO, Broadband and Other Matters) Amendment Act 2011 was passed into law on 30 July.