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Structural separation not on govt agenda - Reynolds

02 Oct 2009

Since the government announced its final $1.5 billion broadband plan commentators have suggested Telecom will have to divest itself of Chorus if it wants to take part. But Telecom CEO Paul Reynolds says that’s not what the government has in mind.

He says he’s spoken to ICT Minister Steven Joyce since the announcement, and he’s found what the Minister has said privately and publically “quite encouraging.”

“Government has never suggested to us that Chorus structurally separate. In fact I asked Steven Joyce this and he said ‘it’s not on our agenda’.”So how could Telecom own the infrastructure and provide retail services, given that the government is clearly against vertical integration for its ultra fast broadband plan?

“What we’ve suggested to government is that we can take government’s investment, we can give them oversight on how and when it’s spent, we can demonstrate that we earn not a penny on it, and we can deliver to more New Zealanders faster than any other means.”

When asked if Telecom would roll out Fibre the Home as an extension to Fibre to the Node, even if the government rejected the telco's proposals, Reynolds said he believed a hybrid of copper and fibre was the most economic way to deliver fast broadband.

“We know that there’s new technology that will deliver 100Mbps over these hybrid fibre/copper networks so it would be crazy to invest in just fibre right into the home at prices consumers are unlikely to afford when we have phenomenal speeds already.”

“In time I think FTTH is the right solution, but I think there’s at least a decade of hybrid fibre/copper technologies.”

To learn more about Chorus’s evolution to Fibre to the Home, check out the latest Telecommunications Review, published on Monday 5 October.