International Benchmark

New Zealand

By Alessandro Mauro
To submit comments and updates: alessandro.mauro@telecomitalia.it

A general review of the situation of the telecommunications market was carried out in 2006; it revealed a substantial lack of real competition among operators, with consistent barriers to the entrance to the access network. Consequently, the government has imposed on the incumbent operator Telecom New Zealand (TNZ) a reorganization of the company, and has indicated that functional separation of the network is the most suitable tool to contribute to an improvement of the competitive conditions in the market.
TNZ has therefore adopted a series of undertakings inspired by the British model, which were accepted and ratified by the government of New Zealand in March of 2008, requiring separation of the company into three divisions: Network, Retail and Wholesale. The primary scope of the Undertakings was to ensure the respect for the principle of non-discrimination in the access of the other licensed operators to wholesale services offered by the incumbent.
The Undertakings also provide for the establishment of a supervisory board, the Independent Oversight Group (IOG), which occurred on April 1st, 2008, tasked with duties similar to those of the Equality of Access Board in Britain and the Supervisory Board in Italy: it carried on a constant monitoring activity about the actual compliance by TNZ of the terms of the Undertakings, for example with reference to the systems separation process and the achievement of agreed standards on certain products within fixed deadlines in order to guarantee the respect of the principle of equal treatment.
Meanwhile in New Zealand the works for the implementation of the new fiber network started: Fibre Crown Holdings is the public body that will handle 1.5 billion NZ dollars earmarked for the new network, which will reach 75% of the population in an area classified in 33 different areas.
Many operators expressed interest to participate in events: 15 operators or consortia formed by several operators have expressed their intention to participate in an investment project that will last a decade.
TNZ is one of these: the incumbent had to make a decision between two options:

  1. Participate in the auction, but in this case it was explicitly asked to carry out a structural separation, which would go beyond the current functional separation already adopted.
  2. Not participate in the auction, becoming in fact a competitor of the government.