This week it was announced that the incumbent telco will demerge so that Chorus, the firm’s fixed-line infrastructure arm, would be able to participate as an independent entity in the upcoming award of government contracts for the building of a national broadband network.

It’s believed that this is the first time that an incumbent has undertaken complete separation. The new structure should mean that New Zealand avoids the ‘incumbent problem’ Australia suffered when full-scale war broke out between Telstra and the government around the role of the still vertically-integrated incumbent in the development of that country’s NBN.

Shareholder approval for the complete services/infrastructure split in New Zealand was gained this week.

New Zealand’s National Party leader John Key announced the ambitious plan to put broadband into every home and business through fibre cables over the next six years if his party wins the next election. Mr Key said that with the fibre network he wanted, people would be able to use the internet at lightning speed – essential if the country was to increase productivity and remain internationally competitive.

But Communications Minister David Cunliffe saw nothing but problems and trouble.

“It’s back to the future…if this extravagant subsidy is ever rolled out all the good work the Government, industry and business have done in dismantling Telecom’s monopoly position will be lost,” he said.

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The new softswitch – which upgrades Telecom Cook’s core wireless network to more efficient, IP-based technology in order to reduce costs and enable value-added services such as integrated SMS, voicemail, GPRS and pre-paid calling, has been in deployment since September 2007, and the final network cutover was accomplished last week. The UltraWave solution includes an overall expansion of the network’s capacity to 15,000 from 8,000 GSM subscribers.

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(Background info: This group of islands in the South Pacific Ocean, about one-half of the way from Hawaii to New Zealand was named after Captain Cook, who sighted them in 1770. After being administrated by Britain and New Zealand, in 1965, residents chose self-government in free association with New Zealand. Total Area: 237 sq km, population: 21,750: The World Fact Book, CIA)

If I were managing an incumbent telco, claiming dominance in various markets and providing poor broadband service, the NZ decision will give me nightmares; but more than that, it will cause me to seriously consider BT type voluntary reorganizations.

AFP: New Zealand orders Telecom split

Telecom, long accused of using its dominant position to stifle competition, will have to break up into wholesale, retail and network operations.It will have to give competitors access to its network linking New Zealand’s 4.1 million people at the same price it will charge its own retail arm. The government said the split should be completed by the end of March 2008.

“It will underpin increased competition and efficient investment for the long-term benefit of all New Zealanders,” Communications Minister David Cunliffe said.

Incentives for Telecom to develop its network should increase Internet speed and capacity, he said.

The government first signalled it wanted a split last year after it expressed frustration at the slow take-up and expensive charges for broadband Internet.

Competing Internet service providers (ISPs) have complained that Telecom’s monopoly position in the network has hindered the introduction of faster and cheaper Internet services.

The government had already ordered Telecom to open up access to its network to competitors and the operational separation is intended to make its network operations more transparent.

The restructuring is similar to the split carried out by BT Group (British Telecom) last year and the New Zealand company’s incoming chief executive Paul Reynolds is a British Telecom veteran.

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More than 30 countries around the Pacific Ocean have tested a system to warn them of approaching tsunamis.
The exercise began with a mock alert at the Tsunami Warning Centre in Hawaii.
An earthquake with a magnitude 9.2 was imagined to have struck near the coast of Chile, sending a tsunami racing across the eastern Pacific.
A second mock earthquake alert, north of the Philippines, will provide a further test on Wednesday.
Governments will report back on how efficiently they received the tsunami warnings, relayed through various circuits including weather services, emails and faxes.
The drill, co-ordinated by the Hawaii warning centre, will also measure how well the message is relayed through local emergency systems.

‘Already a success’
At the start of the test, a beeping noise sounded throughout the warning centre on Hawaii’s Ewa Beach, and within minutes the first alerts were sent out.
“Even before the exercise started, we considered it to be a success in the sense of having so much interest from all the countries,” said Charles McCreery, director of the warning centre.
“Showing their willingness to co-operate, that’s something we have never seen before.”
Correspondents say governments’ interest in tsunami alerts had waned before the catastrophic Indian Ocean tsunami of December 2004, which took more than 200,000 lives.
Two actual earthquakes struck on Tuesday during the test – a magnitude 7.4 quake north of New Zealand, and a magnitude 6.8 off Indonesia. No casualties were reported.

Wednesday test
Another mock test on Wednesday will envisage a magnitude 8.8 earthquake north of the Philippines.
Officials there, and in Thailand, Malaysia and American Samoa, will go one step further by staging real evacuations.
A Pacific warning system has been in place since 1965, but this is largest test of the system since its inception.
The exercise may serve as a model for future tests in the Indian Ocean.