New Zealand - Market Analysis - November 2006

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Last updated: 20 Nov 2006 Update History

Report Status: Archived

Report Pages: 12

Analyst: Paul Budde

Synopsis

Directly following the New Zealand Government’s regulatory overhaul in mid-2006, Telecom announced plans to ‘voluntarily’ move in the direction of operational separation and better wholesale service. It also foreshadowed better UBS services in 2006, ULL in late 2007 and Naked DSL in 2008. However, as long as there are grey areas, Telecom will use them and, to a certain extent, it will argue that this is in the interest of the company’s shareholders. As we have seen in other parts of the world (Europe and SE Asia), only when there are unequivocal national policies in place, is there an incentive for the incumbent to move. We still believe that Telecom was genuine in its promises and we are cautiously optimistic that over the longer term we will see the positive effects of this. Moving into 2007, the telco industry will see most current telco products commoditised, and this will make it impossible to survive if companies don’t have the size and volume to compete successfully.

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