British telco giant BT has thrown support behind the Government's plan to split Telecom, saying it will come closer to achieving true telecommunications competition than in any of the 170 countries BT operates in.
In feedback on proposals for the separation of Telecom into three units - retail, wholesale and network - BT has countered many of Telecom's objections to the proposal.
BT has been held up as the market leader in the regulation of telco monopolies and is the basis for the Government's model.

In 2005 the British phone company came to an agreement with the British regulator Ofcom to undergo voluntary regulation, which saw it create an operationally separate network unit, Openreach.
BT said regulation was "desirable" when a single player dominated the network and retail markets, especially given the high financial barriers to building a competing network.
It offered comment on the Government's model but said they were merely refinements "to an overall strategy we believe to be positive for fair competition, and New Zealand businesses and consumers".

However, BT said it was not convinced Telecom's proposal for operationally separate retail and wholesale units, with a structurally separate network company, would lead to quicker delivery local loop unbundling and bitstream.
"Nor is it likely to provide greater incentives to invest," it said.
"While the Telecom proposal is interesting and has merit in parts, we can see no compelling reason, based on their stated concerns and objections .

.. for the MED OS [operational separation] proposals to not proceed.

"
The separation would force Telecom to open its network to rivals, bringing a greater range of products and services to consumers.
Telecom has also suggested splitting in three, but with a structurally separate network company and a desire for gradual reduction in the regulation of its retail and wholesale businesses.
BT said operational separation, similar to that proposed by the Government, had delivered improved competition and investment in Britain, contrary to Telecom's complaint it was "practically unworkable" and would not meet Government goals for greater competition and investment in the sector.

Even under continuing regulation BT said it planned to invest more than ?10 billion ($27 billion) on a next-generation network.
BT said Telecom's suggestion that the Government plan for operation separation would reduce investment incentives was "puzzling" and the reverse of BT's experience in Britain.

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