New Zealand - Telecom New Zealands Proposal for Structural Separation

Report Cover Image

Last updated: 23 Aug 2010 Update History

Report Status: Archived

Report Pages: 6

Analyst: Paul Budde


As foreshadowed a month ago Telecom has finally put forward its proposal to government-owned Crown Fibre Holdings regarding the conditions under which it will be prepared to structurally separate. Obviously any such deal would still require (75%) shareholder approval.

While there are very few details, in essence the proposal is to structurally separate the company, through a demerger into two companies, which would create Chorus2 as a new and entirely standalone company.

Furthermore, it is proposed to integrate the Ultra-fast Broadband initiative with the Rural Broadband Initiative. Integrating these two initiatives would allow for the extension of the reach of Ultra-fast Broadband into rural areas, well beyond the 75% coverage area. The economies of scale that can be achieved through this proposal and through utilising existing assets will mean rural New Zealand can more quickly obtain the benefit that fibre will bring. BuddeComm supports this suggestion as, in the words of Telecom, ‘the rural sector has both the need and the applications available to be able to take advantage of the benefits of fibre-based telecommunications’.

The key to a successful path forward from here is a careful balancing of interests between those of Telecom and the rest of the industry. The participation of Telecom in the UFB is very welcome but, at the same time, it will add to the complexity of the process.

This Investors Research Note will also include comments on the partial sale of Telecom’s Australian subsidiary AAPT.

Related Reports

Share this Report

Purchase with Confidence

Moreover, the customer service personnel at BuddeComm helped me remedy an administrative problem within 5 minutes of sending the request...seriously, less than 5 minutes. All in all, is a well-functioning organization with a useful product.

Eli Jellenc, VeriSign-iDefense Security Intelligence Services

Research Methodology

BuddeComm's strategic business reports contain a combination of both primary and secondary research statistics, analyses written by our senior analysts supported by a network of experts, industry contacts and researchers from around the world as well as our own scenario forecasts.

For more details, please see:

Research Methodology

Sample Reports

A selection of downloadable samples from our Annual Publications catalogue.

Download a Sample Report

More than 4,000 customers from 140 countries utilise BuddeComm Research

Are you interested in BuddeComm's Custom Research Service?

News & Views

Have the latest telecommunications industry news delivered to your inbox by subscribing to Paul's FREE weekly News & Views.