Paul Reynolds

Telecom has today received confirmation that Steven Joyce, Minister for Telecommunications, has approved variations to Telecom's Undertakings on Operational Separation.

Telecom submitted its fourth variation request in May 2010, and following feedback from the Ministry of Economic Development officials and the Minister, submitted a revised version of the variation request for approval.

"We are pleased that the Minister and his officials have arrived at a pragmatic and deliverable solution for Telecom's variation request," said Paul Reynolds, Telecom CEO.

"These variations provide us with important investment certainty and with the additional time we need to deliver the affected milestones without creating unacceptable levels of risk for our customers, or to our systems. We are confident in our ability to deliver these variations."

"Telecom remains utterly committed to the delivery of its Undertakings, and has already delivered more than 150 milestones, including the delivery of industry-wide equivalence. Telecom is one of just two incumbent telcos in the world that provides access to its fixed line infrastructure to all industry participants, including its own retail business, on equivalent technical and commercial terms."

The variations to the Undertakings include:

Broadband Migration:

Migration of 90% of retail broadband customers onto UBA moved from 31 December 2010 to 31 July 2012;

Migration of 100% of retail broadband customers onto UBA moved from 31 December 2011 to 31 December 2012;

Non-standard connections permitted on a case by case basis where legitimate technical and/or customer impacting reasons mean it is not practicable to migrate customers within the specified timeframe.

New Wholesale Systems:

Commence a comprehensive industry consultation on a range of sensible technology service improvement projects Telecom Wholesale can undertake in lieu of continuing with its FMO programme, facilitated by an independent chair;

Report back to the Minister by 31 March 2011 with proposed alternative commitments.

PSTN Migration

Continue to work on addressing and/or identifying potential resolutions to issues with VoIP services raised by trial participants;

Facilitate industry consultation on low speed data interoperability and house wiring issues with VoIP services; and

Report to the Minister by 31 March 2011 on interoperability issues we have identified and potential solutions for these.

"These variations will allow for a smoother delivery of a relatively small portion of the Undertakings. It is worth noting that this change is just the fourth variation to the Undertakings in more than two years," he said.

Telecom's capex guidance for FY11 remained unchanged.