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Execs from Telecom New Zealand (Telecom) visited BT and Ofcom last month to see what measures have been undertaken to improve telecoms competition in the UK.

Industry onlookers reckon the visit shows that that Telecom is considering the idea of splitting its wholesale and retail businesses to head off criticism from its own government.

The Kiwi Government has already signalled its intention to drive through a series of measures to force incumbent telco Telecom to unbundle the local loop and increase competition.

A raft of proposals - including LLU, increased regulation, and the promotion of investment by rival operators in fibre, wireless and satellite networks - have been put forward as a way to drag New Zealand out of the bottom third of the OECD's league table of broadband countries.

The Kiwi government has decided that key to this lacklustre performance is the lack of effective competition among broadband and telecoms providers.

Telecom has already rejected the proposals claiming that there are no guarantees that the measures "will deliver on the government's aims of high speed broadband throughout New Zealand".

However, reports from New Zealand that execs from Telecom have visited the UK shows that the telco is taking the matter seriously, especially if, as reported, the Government has already threatened to break-up Telecom if it fails to adopt the measures.

Earlier this year BT unveiled a new access services division called Openreach created as part of a regulatory settlement with Ofcom.

Openreach was set up to ensure that rival telcos and operators get transparent and equal access to BT's phone network after firms complained that BT was abusing its dominant position as both a wholesale and retail provider of telecoms services.

This partial "splitting" of the former monopoly meant BT was spared an investigation that could have led to its break-up. ®

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