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No. of Recommendations: 4
Telecom would be "suffocated" by a Government plan to split it into three operating divisions, it says in a submission to the Economic Development Ministry.

The company received support from Business New Zealand and the Tourism Industry Association, but scant sympathy from the Commerce Commission and rival telcos. They have mostly opposed a Telecom alternative that it sell its fixed-line network to an industry or Government-backed consortium.

Telecom put a brave face on the cool response, saying that as it had only recently released its proposal to hive-off its network, it was "understandable that in some quarters there has been confusion or misunderstanding" about some of its proposal.

It reiterated that, if forced to separate into three divisions, it would invest only a third of the $1.5 billion it says is needed to meet the Government's target of 5 megabit per second broadband connections in 90 per cent of New Zealand homes by 2010.

The result would be that "infrastructure investment would stall". A digital divide would then become imbedded between inner cities and the rest of New Zealand, it said.

"New Zealanders will continue to demand investment to keep up with world-best standards, which could result in a spiral of arbitrary regulation as governments seek to plug gaps and appease disaffected consumers."

The Commerce Commission said Telecom was wrongly assuming the commission would set pricing for local loop unbundling and wholesale access to its network, discouraging infrastructure investment.

"Telecom's unsupported assertions of a regulatory bias to lower returns, and a propensity on the part of the commission to expand regulation once investments have been made, are unfounded," it said.


http://www.stuff.co.nz/4064618a13.html

David
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No. of Recommendations: 1
The lure of the capital gain (for I bought it after it nose dived), the regulatory adversity, the poor investments in the Australian operations, the inability of management to provide guidance for the next fiscal year, the failure to pay a special dividend from the proceeds of the sale of the yellow pages, last year's dividend reduction and elimination of the special dividend all proved too much for me. So, more then ten days ago I exited NZT.

David, who now expects the stock to soar.
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Hey David,

I appreciate your honesty and hanging in there with us. What a wild 15 months it was.

Briansan
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The lure of the capital gain (for I bought it after it nose dived), the regulatory adversity, the poor investments in the Australian operations, the inability of management to provide guidance for the next fiscal year, the failure to pay a special dividend from the proceeds of the sale of the yellow pages, last year's dividend reduction and elimination of the special dividend all proved too much for me. So, more then ten days ago I exited NZT.

FWIW, I sold 1/3 of my NZT recently myself. The other 2/3 is in another account and, frankly, it's hanging by a thread as well.

While we're at it, does anyone else wonder why they waited until today to announce the Q3 dividend? It's ex-dividend today in Oz, tomorrow in the US, and next week in NZ. In past they've not waited to such a late hour.

Regards,
Tom
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No. of Recommendations: 3
Gattung's parting shot:

The Government should spend hundreds of millions of dollars in partnership with phone companies if it wants to see widespread fast broadband soon, according to outgoing Telecom chief executive Theresa Gattung.

It would cost $1.5 billion to give most people a high-speed broadband Internet service, but Ms Gattung says industry players would cover only part of that, because of the high cost and uncertain revenues from the investment.

It would be "reasonable" for the Government to lead investment in broadband to lift economic performance, in the same way the state spent money on roads.

If not, it would take "much, much longer" to get fast broadband around the country.

Telecom plans to spend about $500 million on the Government's Digital Strategy target of 90 per cent of New Zealand getting access to fast broadband within three years. It is highly expensive to run fibre-optic cable from Telecom's phone exchanges to about 7000 roadside cabinets.

That leaves a $1 billion gap to be filled by other industry players, or the Government, possibly in some form of partnership with private companies, she said.

Others argue that Telecom will have to spend more to catch up on investment in the face of competition, brought about by government regulation.

Ms Gattung said the Government's broadband target of five megabits a second speed was "desirable" but how the industry would get there and who should pay was not clear.


http://www.stuff.co.nz/4079602a13.html

David
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No. of Recommendations: 2
Here are a couple of news stories from down under today:

The Commerce Commission has turned down a request from Telecom for a delay in the timeframe for the company to provide its first standard terms proposals for unbundling the local loop.

The commission said today it was reaffirming its current timetable to develop regulated unbundled local loop and co-location services.

On Tuesday Telecom sought the delay for its first proposals, which are due next Tuesday.

The commission said that after considering Telecom's request, it had decided to stick to the timeframe that it notified to Telecom in early April.


http://www.stuff.co.nz/4088232a13.html

Telecom is splashing out $300 million on a new mobile phone network based on different technology from its existing network, but says customers can use their current cellphones for five more years.

http://www.stuff.co.nz/4088176a13.html

David
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