Telecom to announce network sale today?
September 26th, 2007 at 8:23 am by David FarrarThe Dom Post (which often gets very accurate leaks from Telecom) predicts that today the Government and Telecom will announce at 9 am that after their three way split into network, wholesale, the network division will be sold off as a separate company.
No details yet but I suspect the trade off for Telecom is a less rigourous regime between their wholesale and retail arms, in exchange for the sale of the bottleneck network and access section.
The devil will be in the detail but in principle I have been a long term advocate of structural separation. This could be very exicting. If done well the network company could become a Transpower type national grid on which a fibre to the home infrastructure could be built.
Hilarious related scene on TV One Breakfast as the business correspondent stated (twice) that Telecom had said they need to employ 700 million extra staff to cope with the split. Paul and Pippa were in tears of laughter as they teased him over whether Telecom really will need to employ the entire population of the US and Europe.
Related posts:
- The Telecom Split
- Structural Separation could increase Telecom’s worth?
- Telecom split confirmed
- It’s Telecom
September 26th, 2007 at 8:45 am
DPF,
The economics of widespread FTTH are still going to be dodgy, regardless of whether the network business is retained by Telecom or spun out. Certainly for new developments it makes sense to run FTTH rather than to lay copper. But, for example, running fibre down Hobson St in Thorndon just doesn’t stack up unless you can tap a hefty Government subsidy.
If the network is to be spun out then, as you say, the devil will be in the detail. Particularly the detail about network access pricing – get that just slightly too low and the incentive to invest disappears like the proverbial snowball. I believe that Ministers (but perhaps not yet the Commerce Commission) are starting the realise that with large infrastructure assets the costs of under- and over-investment are very asymmetric. A little bit of over-investment results in consumers paying slightly more than they perhaps should have in an optimal world. A little bit of under-investment means the lights go out, or the traffic stalls, or the broadband network chokes. Let’s hope the Commerce Commissions starts to err a little towards encouraging investment.
Vote:September 26th, 2007 at 2:30 pm
700 million
He might have inadvertently slipped a figure of future projections thought hopefully netted in corporate discussion
Vote:September 26th, 2007 at 5:42 pm
700 million?
Vote:That will be the people required to discover, design, implement, audit and administer any carbon credits that are involved.
September 26th, 2007 at 9:19 pm
Hilarious? Man, you gotta get out more.
Vote:September 26th, 2007 at 10:01 pm
Imagine what the ERA would do with a company with 700 million employees…
Incidentally DPF, when you gonna dish the due dirt on the ERA? Every other day it seems I read about the ERA awarding masses of money to someone who really doesn’t deserve it on terms that would be thrown out if it ever went to appeal. The latest one is now the ERA has ruled that pornography is “unsafe”, even though it’s not illegal, or to my knowledge legislated against. Some people find meat offensive, does that mean an employer can be now fined if someone has a hamburger in the lunch-room?
Vote:September 26th, 2007 at 10:05 pm
PS, back on topic. I always laugh when I hear people moaning about broadband speeds. Even if we all had 100MBit fibre to our houses, we are still surfing mostly the rest of the world, and therefore are choked by our international pipe. Until someone does something about that, we aren’t going to see any significant improvements in real net responsiveness to offshore (99% of them) sites. And laying trans-pacific submarine cables is extremely expensive. Extremely.
Unless all you want to surf is trademe or something…
Vote: