TUANZ wants more separation details from Telecom

Ernie Newman, chief executive of the Telecommunications Users Association(TUANZ). Photo / Paul Paul Estcourt

The Telecommunications Users Association (Tuanz) wants Telecom to be more open about its plans for voluntary structural separation.

The call for Telecom to "declare its hand" came as Tuanz gave guarded acceptance of some changes the company is seeking to its undertakings for operational separation.

The undertakings, which set out the requirements for splitting Telecom into three separate business units, came into effect in March 2008.

In a statement today, Tuanz chief executive Ernie Newman said that each time Telecom requested variations from its operational separation undertakings, the pressure for it to declare its hand on voluntary structural separation increased.

"If the company wants support for such variations in the future, it should first be a great deal clearer about its intentions in this direction," Mr Newman said.

"Tuanz would strongly support a move to voluntary structural separation as a pragmatic move to position the company for the future, but on condition that this be a voluntary move by the company and not one imposed by the Government."

In relation to Telecom's request to change the undertakings, Tuanz said it had "cautiously acknowledged the case for Telecom to be relieved of some of the more onerous requirements ... but with caveats".

It accepted at face value the argument that requiring Telecom to meet the current deadline to migrate customers into a new wholesale broadband service could expose end users to some risk of service failure, Mr Newman said.

But if Telecom was given relief, Tuanz would not want that to be taken as a signal the Government would grant variations any time there was slippage in a timetable.

"We also see little merit in forcing Telecom to develop new operating systems designed in an earlier environment, when the move to ultra fast broadband will potentially make this investment redundant. If cost is driven into Telecom's operations wastefully, it is their customers who will pay," Mr Newman said.

Thirdly, Telecom wants to remove a requirement that it migrate 17,000 customers onto a new VoIP (Voice over internet Protocol) over copper service by the end of this year.

Mr Newman said Tuanz could live with some modest extension of time, but saw Telecom's failure to deliver as being within the company, rather than an industry-wide issue.

When Telecom asked for the changes to the undertakings in May, the company said it was "fully investigating structural separation in order to participate in the Government's Ultra Fast Broadband (UFB) initiative."

The UFB initiative would fundamentally reshape the structure of the entire telecommunications industry in this country, Telecom said.

But the company was required by law to deliver significant system and technology projects envisaged for a pre-fibre world. A large proportion of those projects must be deployed this year, so it seemed sensible to reassess them to avoid significant congestion and waste.

Submissions on Telecom's request for changes to the undertakings closed on Friday.

- NZPA