Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Joyce signs off on Telecom carve-up

Joyce signs off on Telecom carve-up

By Paul McBeth

Aug. 30 (BusinessDesk) – Telecom Corp.’s proposed demerger is another step down the track after Communications Minister Steven Joyce signed off on the phone company’s proposal to split its assets.

Joyce said Telecom’s asset allocation plan met the government’s requirements, and will be monitored by the Commerce Commission to ensure all arrangements are on an arm’s length basis and won’t harm competition. The phone company plans to carve out its network Chorus unit into a separate company, freeing it up from regulatory costs associated with its operational separation and letting it tap $929 million of tax-payer funding to build a nationwide broadband network.

“In making my decision to approve Telecom’s plan, I consulted with the Telecommunications Commissioner who agreed that the asset allocation plan met the requirements of the Telecommunications Act,” Joyce said in a statement.

Telecom’s shareholders still have to vote on the deal which will leave the bulk of the fibre and copper assets under control of the new Chorus entity. The new retail company will end up owning the mobile network assets, service platforms for voice and data applications, international assets including AAPT, the stake in the Southern Cross cable and control of the national backhaul services.

The phone company hasn’t announced how it will distribute its debt between the two entities, and faces a likely cut to its long-term ‘A’ credit rating by Standard & Poor’s. The rating agency last week said the demerger will weaken Telecom’s “strong business profile.”

Telecom boosted annual underlying earnings 2% to $388 million as it stripped out $195 million of costs in the year ended June 30. Its bottom-line profit was hit by a $257 million impairment charge on assets associated with its copper network after the split meant it will no longer roll out certain products.

The shares rose 0.9% to $2.765 in trading yesterday, and have climbed 26% this year.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Frog Recruitment: Kiwi Workers Reluctant To Make Business Trips Across The Ditch Despite Trans-Tasman Bubble Opening

When the trans-Tasman travel bubble opens today, many Kiwi companies won't be rushing to buy an air ticket, reluctant to cross the ditch to do business. The latest survey conducted by leading recruitment agency, Frog Recruitment of nearly 1,000 New Zealand ... More>>

Tourism: Employers Welcome Back Working Holidaymakers

Tourism businesses gearing up for the return of Australian visitors from next week will be relieved to learn that they will also have access to an offshore pool of much-needed job candidates, Tourism Industry Aotearoa says. Tourism employers around ... More>>

Commerce Commission: Latest Broadband Report Confirms Improved Performance Of Premium Fibre Plans

The latest report from the Commerce Commission’s Measuring Broadband New Zealand programme shows that the performance of Fibre Max plans has improved substantially. This follows a collaboration between the Commission, its independent testing partner, ... More>>

Air New Zealand: Capital Raise Deferred

Air New Zealand has decided to defer its planned capital raise to later in 2021 allowing more time to assess the impacts of recent developments on the airline’s path to recovery. 'We’ve seen some clearing of COVID-19 clouds recently, with ... More>>


Stats NZ: Prices For Transport And Housing Rise In March 2021 Quarter

Higher prices for transport and housing led to a 0.8 percent lift in the consumers price index in the March 2021 quarter, Stats NZ said today. Prices for getting around rose in the March quarter. Transport prices rose 3.9 percent, the biggest quarterly ... More>>

Stats NZ: New Report Shows Impact Of Demands On Land In New Zealand

A new environmental report released today by the Ministry for the Environment and Stats NZ, presents new data on New Zealand’s land cover, soil quality, and land fragmentation. The land cover data in the report, Our land 2021 , provides the most ... More>>

ALSO:

Stats NZ: March Card Spending Rebounds Despite COVID

There was a lift in retail card spending in March following a fall in the lockdown-disrupted February month, Stats NZ said today. Seasonally adjusted retail card spending rose by $53 million (0.9 percent), compared with February 2021. Visit our website to read ... More>>