Government sticking to Telecom separation plan

Communications Minister David Cunliffe said today the Government would stick by its plan for a three-way operational split of Telecom.

The Government said in December it wanted Telecom to split into three units - network, wholesale and retail operations.

Telecom said this was too costly and impractical and put up an alternative of selling its network assets to the Government or private investors.

"We will not go backwards and reverse the Telecommunications Amendment Act or be changing what is a fundamentally sound best practice regulatory framework," Mr Cunliffe said in a speech to the Tuanz (Telecommunication Users Association of New Zealand) conference.

In April, Telecom said the Government's plans would limit its ability to invest in infrastructure and it said if the plan went ahead it would invest only $500 million of the $1.5 billion needed to upgrade the nationwide copper phone network.