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Telecom NZ to revise separation timetable

Telecom NZ to revise separation timetable

Telecom NZ (ASX:TEL) has revealed it will likely be unable to meet its self-imposed timetable of enacting structural separation by the end of June.

CEO Paul Reynolds said meeting the self-imposed deadline would have required Telecom to have reached a deal with Crown Fibre Holdings - the company set up to roll out New Zealand's Ultrafast Broadband (UFB) network - last year.

But the company was left out of first-round negotiations over its participation in the project in September, and only shortlisted as a bidder in December.

“Telecom...is now in detailed negotiations with Crown Fibre Holdings [but] the final timetable for demerger will be determined when we are able to reach an agreement.”

Telecom has agreed to split its Chorus retail division from the rest of the country as a condition for its participation in the NZ$1.5 billion ($1.15 billion) project to rollout a fibre network reaching 75% of New Zealand homes.

But Reynolds said structural separation is a complex undertaking that will take time to pull off. “There are a wide range of commercial, regulatory, legislative and disclosure considerations involved,” he said.

Any deal on separation would also require the approval of Telecom shareholders.

For its part, Telecom is leaning on the government to agree to legislative and regulatory reforms aimed at loosening the measures designed to reduce the operator's advantage over its competitors.

TEL shares declined 0.57% in Wednesday's trading to $1.75.

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Tags Crown Fibre Holdingsstructural separationASX:TELTelecom NZPaul Reynolds

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