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Telecom separation good for New Zealand

Media Release - June 27, 2006 - "Today's announcement that Telecom is to separate its wholesale and retail operations is good news for the Internet in New Zealand," said Keith Davidson, Executive Director of InternetNZ today.

Mr. Davidson was commenting following Telecom's announcement this afternoon that it intends to create a separate, independent wholesale operation focused on delivering service equivalence to all its wholesale customers, presumably including Telecom retail. "Such a split should deliver what the regulations announced last month on their own could not – better market incentives on Telecom to behave in a competitive manner. We applaud the improvement in market competition that can arise from these changes. "A key component of making such a separation work is the proposed oversight by an independent monitoring group. While the wholesale operation will remain part of Telecom, this is a definite step in the right direction. "A better step for Telecom and for the market would be to appoint a fully delegated Board of Directors with a separate General Manager and its own corporate services, to manage the wholesale division. InternetNZ urges Telecom to consider this, over and above today's announcement. "InternetNZ also notes Telecom's comments about converged services and the rollout of Next Generation services. Such comments provide a reminder that a wholesale split does not resolve all the competition issues that arise in the New Zealand market, with a network provider that is still the only provider in many parts of New Zealand. As such services are rolled out, competition concerns need to be borne in mind. "Overall, one can only say ‘Well done Telecom – keep on moving in this direction.' The announcement today appears to be putting into action the promises Telecom has made to mend its ways. "InternetNZ looks forward to monitoring and supporting the rollout of the regulated services and the developments announced today," concluded Keith Davidson. ENDS27 June 2006 Contact: Keith Davidson, Executive, 021 377 587

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