Invest in NZ | January 20, 2011
After failing to sign a contract with the New Zealand government in its Ultra-Fast-Broadband (UFB) network plans, the NZ Telecom has reported it may not be able to attain its goal of structurally separating its business by the end of June this year. The telecoms giant flopped in a bid to win the multi-billion New Zealand UFB initiative, with structural separation one of the requirements it was supposed to fulfill.
The telecoms firm Wednesday said that it would announce a revised timeframe for the structural separation of its business upon entering into a contractual arrangement with Crown Fibre Holdings for the UFB project. Late last year, December, Telecom was confirmed as a negotiating partner for the UFB roll-out and is now in detailed negotiations with Crown Fibre Holdings.
The company has proposed splitting into two separate companies as part of its proposed package for involvement in UFB. Telecom chief executive officer Paul Reynolds noted that based on initial timeframes for the UFB project, Telecom had previously indicated that it would aim to enact structural separation by the end of June 2011. However, that would have required Telecom to have reached a contractual arrangement with Crown Fibre Holdings last year for this timeframe to be achieved, said Reynolds.
The firm admitted that might not be possible. The final timeframe for demerger would have been determined if Telecom had been able to reach agreement for the UFB project last year. The company will ask shareholders to vote on a division into two businesses which will be separately listed on the NZX if it secures a role in building the UFB network, in which the Government is investing up to $1.35 billion.
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