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 It's official. Telecom must split into 3 units and provide open access to its network.

The Government will enforce a three-way operational separation on Telecom as it strives to boost competition in telecommunications and cut prices for consumers. Telecom estimates the move will cost it about $360 million. Communications Minister David Cunliffe said yesterday that the Government hoped to increase competition and investment in the sector for the long-term benefit of all New Zealanders. Telecom must run a separately branded fixed-line network unit independently from its wholesale and retail sales businesses. It must also establish an independent oversight group, backed up by the Commerce Commission, and faces tight timeframes and potential $10 million fines if it breaches rules. The details of the announcement are broadly in line with plans the Government outlined in April, which mimic the breakup of British Telecom. Telecom chairman Wayne Boyd initially labelled the plan unworkable and Telecom put forward a structural separation plan of its own. However, Mr Cunliffe said the company had changed its mind, referring three times to an excellent working relationship with incoming Telecom chief executive Paul Reynolds. He went as far as thanking Mr Reynolds for his input. "It's my expectation that Telecom not only will be able to implement this but they are in agreement with it," Mr Cunliffe said. "It won't be lost on people that Dr Paul Reynolds played a leading role in implementing the BT split so I'm sure that he knows how to do."...

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