Telescum

Press Release by Telecom New Zealand at 8:36 am, 09 Aug 2007

Telco industry takes the first step to local loop unbundling

Telecom opens its exchange doors for the first time with an early trial of local loop unbundling and co-location with service providers, ihug and Orcon.

From today, engineers from ihug and Orcon can enter Telecom's Ponsonby and Glenfield exchanges to install their own telecommunications and internet equipment for testing, so that later in the year they can deliver communications services direct to consumers over Telecom's copper lines.

Vodafone got a nasty regulatory surprise this week, when the Commerce Commission issued a draft determination on co-location and roaming. If the draft stands through to the final version, Vodafone may end up having to give access to its competitors, and allow them to put in equipment on its network sites.

This week’s draft determination from the Commerce Commission on how much access to the local loop – the last bit of network between your place and the telephone exchange or roadside cabinet – is seen as a win for providers.

Providers in the cities, that is. They will pay $16.49 per line, whereas regional providers are looking at twice that. Is this fair? Probably not, given that most other things like co-location in regional exchanges is set at half the price of their townie equivalents.

Telecom is the pot accusing the kettle of being black by predicting Vodafone will be anti-competitive, when they start releasing Telecom simcards.

Telecom chief operating officer Mark Ratcliffe predicts Vodafone may try to prevent customers from switching to Telecom's W-CDMA mobile network when it is introduced next year without first buying a new phone.

Telecom has submitted a plan to the Commerce Commission that, if accepted, would see competitors able to install equipment in 40 of its 600 or so phone exchanges by early 2009.

Telecom says the "standard terms proposal" for local loop unbundling meets the requirements set out by the Commerce Commission. A spokesperson for the commission said it was studying the document but could not yet say whether Telecom had fulfilled its obligations. If not, Telecom could face a fine of up to $300,000.

Telecom said its proposal set out a "bold roll-out plan" for local loop unbundling.

A leading fund manager is warning Telecom's chairman he risks losing shareholders' confidence if the company makes investments that do not earn acceptable returns - even if the rate of return is set by government regulation.

Brook Asset Management executive chairman Simon Botherway made this point in a letter to Telecom chairman Wayne Boyd.

He also suggested that Telecom's board considers selling all its assets and lobby the Government to dump the Telecommunications Service Obligations (TSO) and its shareholder ownership cap. Removing it would open the possibility of a takeover bid.

If Telecom implements its plan to split in two, it will lose its place as the largest company on the New Zealand Exchange. And it would slip down the list of companies on the Australian Stock Exchange and perhaps out of sight of some international fund managers, who own so much of it.

Telecom shareholders are set to reap a $1.1 billion windfall thanks to a widely expected capital return, but looking further ahead the earnings picture gets murky.

This is almost half of the $2.24 billion it made from the Yellow pages sale. However, Chairman Wayne Boyd said that "Telecom would not invest in new technology unless it could get a fair rate of return".

Also Theresa Gattung failed to inform the market of what to expect in the year ahead - while just six weeks away from the start of the new financial year - stating that there were "too many moving parts".

Now that we have the main site running kind of nicely, we have bought back the forums.

All the same accounts are still there so you can go ahead and login using your old password or register a new account. If you register through this page/site your account will be automatically synced to the forum database so you can have one username/password for both logins :-)

You can use the links on this page to get to the forums.

It still not branded as we would like, however it will be soon.

New Zealand has edged up one place to 21st in the OECD table for broadband uptake.

Strong growth in the number of broadband users in the six months to the end of December helped the country swap places with a sluggish Portugal.

New Zealand had been stuck at 22nd in the OECD table for the previous three years and the low ranking was cited as a justification for the Government's decision to fully open Telecom's network to competitors and to propose splitting the company into three operating businesses.