Telecom boss takes swipe at latest review

TOM PULLAR-STRECKER
Last updated 05:00 15/02/2013

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Telecom chief executive Simon Moutter has joined Labour and the Telecommunications Users Association in slating the Government's decision to rewrite the rules underpinning telecommunications regulation.

In blunt comments made after a speech in Wellington, Moutter said "this continual lurching from one set of rules to another is extremely unhelpful".

Communications Minister Amy Adams announced the regulatory overhaul last Friday in a move that was widely perceived as being designed to rescue Chorus from a $160 million annual earnings hit and shore up the consumer appeal of its ultrafast broadband (UFB) network.

The ministerial review will trump an earlier Government-ordered Commerce Commission review that looked likely to slash the price Chorus would be allowed to charge for wholesale copper broadband connections from December 2014.

Telecom has half the copper broadband market and would have benefited from the wholesale price drop, especially as it is currently prohibited from unbundling Chorus's exchanges.

"I am looking forward to seeing what is the problem the review is trying to resolve," Moutter said.

"I haven't seen that laid out. We don't even have fibre in the market but we are starting to review the settings."

Telecom has said it hopes to "soft launch" UFB plans to consumers next month, joining a group of smaller telcos that are already marketing it.

Telecommunications Users Association chief executive Paul Brislen said the industry faced two or three years of stalled investment as a result of the regulatory "bombshell".

Vodafone spokeswoman Sarah Newcombe agreed there was "a fair amount of uncertainty".

Labour has said the average household will lose "hundreds of dollars" by having to continue to pay artificially inflated prices for copper broadband.

Brislen believed the Government's ambition of drafting changes to the Telecommunications Act by the end of this year and enacting them in legislation by the end of 2014 appeared "very optimistic".

"I would expect it to take a lot longer than the end of next year to have legislation before the House."

In the interim telecommunications firms would find it hard to know where to invest, he said.

"We are on our third Telco Act in 10 years.

"We are barely two years into the last one and the Government wants to completely overhaul the regulatory regime."

The commission's copper pricing review may continue in parallel to the Telecommunications Act rewrite, but may be nullified by it.

Chorus has welcomed the Government's review.

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Adams said it would set the regulations that would apply both during and after the construction of the UFB network, providing "increased certainty around the transition path from copper to fibre". Fairfax NZ

- BusinessDay.co.nz

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