Dev Nadkarni/ islandsbusiness.com exclusive
After an ongoing barrage of criticism from customers, wholesale-service providers and the government over the past couple of years, Telecom New Zealand appears to be finally getting its act together.

Over the years, the country’s telecom and internet infrastructure has lagged far behind that of other OECD nations both in terms of range and quality of services and the price, prompting Prime Minister Helen Clark to say that she felt like a poor cousin when she sampled the services available to Koreans while on a visit there.

Last year under a directive of her government, Telecom was forced to unbundle its local loop network enabling wholesalers to access its exchange infrastructure and have better control over providing last mile services to the end user as well as having access to greater volumes of bandwidth.

Then this year, Telecom recruited a new CEO in Paul Reynolds, who had earlier worked in senior positions at British Telecom. Reynolds appears to have quickened the pace of the long overdue changes at the telecommunications giant.

The business is in the process of being restructured with an internal split into three separate arms: retail, networks and wholesale, as has been the case with British Telecom and some other service providers in Europe.

After it was forced to allow access to its exchange infrastructure to competition, other service providers invested considerable sums of money into their own strategies to maximise the opportunity that unbundling brought. But soon afterwards they were crying foul when Telecom announced that it would push fibre optic cables in parts of the country beyond the exchanges, closer to users.

The competition complained that this action would undermine their investment plans in placing their own equipment within the exchanges. But both Telecom and the government have since assured them that there would be many opportunities to tap with their own strategies inside the exchanges.

Meanwhile New Zealand is on the verge of seeing a third mobile operator on its telecom horizon. NZ Communications (formerly known as Econet) plans to launch services in the metros of Auckland, Wellington and Christchurch with a 450 cell site network.

It signed a national roaming agreement with Vodafone NZ for introducing a nationwide mobile service in which if customers happen to travel outside the network coverage of the new service, they will be able to automatically roam on Vodafone's 2G GSM and GPRS network.

The new operator also inked a deal with Telecom to acquire 5MHz out of a block of about 20MHz of spectrum for mobile services. This is in line with the government’s efforts to break the duopoly in the country held by Vodafone and Telecom New Zealand. The new service is to become operational towards the end of this year.

But as of this month, Telecom’s mobile subscribers are in for some inconvenience if they plan to use their Telecom handsets when they are in Australia. Australia’s Telstra is switching off its old CDMA network this month, making Telecom’s mobiles non-functional in the country.

The company began informing customers about this change, telling them that they would need to purchase new WorldMode handsets that are capable of working on Telecom's network as well as GSM technology networks abroad including Telstra's new mobile network called NextG that is soon to be rolled out. Customers not wishing to buy WorldMode handsets will be able to take with them a ‘loan phone’ free of cost courtesy of Telecom when they travel to Australia.

After lagging behind the OECD in the telecommunication sector for over a decade, the New Zealand government has now put in place a strategy in right earnest. 
Speaking at the New Zealand government’s Digital Future Summit in Auckland last month, Telecom CEO Reynolds reiterated the importance of working together with other service providers in marked contrast to the company’s policy in previous years that was widely seen to shut out other providers. He has also announced plans to invest NZ $1.4 billion across the coming four years to accelerate its broadband investment.

Telecommunications Minister David Cunliffe though pointed out that this was not enough as far as New Zealand’s standing in the OECD was concerned especially in a sector like telecom where other countries were progressing even faster from a point well ahead of New Zealand.

He outlined the government’s plan to closely work with the private sector of the telecommunications industry in helping achieve goals and hinted at a number of ways of raising the billions of dollars of investment required in the sector to upgrade the network and broadband accessibility as well as speeds not only in the urban areas but provincial centres as well.

The summit has been hailed in telecommunication circles in New Zealand as one that signals sweeping changes in the sector in terms of a new mindset that encourages openness, cooperation, deregulation and proactive government participation particularly in helping put in place innovative implementation frameworks and financing schemes.