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Kiwi carrier heads to court over split

Competition watchdog not happy

Internet Security Threat Report 2014

Telecom New Zealand has attracted the wrath of competition watchdog, the Commerce Commission over the carrier’s plans to structurally separate.

The Commerce Commission will issue court proceedings against Telecom NZ claiming that the company has failed to meet government regulations on non-discrimination under its current proposal.

The carrier announced earlier this week that it would split its network and retails services divisions into two distinct companies after securing the New Zealand's government tender to build 70% of the nationwide ultrafast broadband network. Under the agreement, retailers are only allowed minority stakes in the new network.

The commission alleges the company, which has both retail operations and owns a large portion of the country's telecommunications infrastructure, has failed to provide other telecommunications service providers with access to part of its network on the same terms as it did its own retail operations.

“Telecom's failure to provide this service has reduced the financial feasibility of unbundling local exchanges, reduced the extent of unbundling, and consequently reduced the extent of retail competition," Telecommunications Commissioner Ross Patterson said.

The Commission considers Telecom’s failure to provide this service to other telecommunications companies while providing it to its own retail business has caused serious harm to competition in telecommunications markets, deterred efficient investment by other companies in telecommunications infrastructure, and resulted in significant commercial gain to Telecom.

Telecom NZ said it plans to defend any proceedings brought against it and does not believe it had breached any non-discrimination obligations. ®

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